TAAlina and Thoughts

I'm afraid that this will be a post that will bring up more questions, than answers. For a long time now, it was legally settled that the duties of the board and the management is owed primarily to the shareholders. However, in the last 10 years, this is no longer the case as the law has moved on . It appears that interests of all stakeholders have to be taken into account , particularly in the UK if not elsewhere. A stakeholder is any entity that is affected by the company’s activities. The Business Roundtable , a lobbying group, in 2019 shared commitments that each stakeholder is essential whether employees, customers, suppliers, community or shareholders. Whilst the CEO needs to be attuned to shareholders so as not to lose their respect, he or she will need to figure out how much time should be committed to each stakeholder to find out what is important to them? One supposes that it would depend on the issue being faced . Shareholders are met annually, during th...

This photo shows durian flower buds. On one of the limbs of my durian tree. Oh yes, I was very excited, until I learnt that 2 factors will determine whether any of these will fruit: fruit bats and warm weather at the right time. I'm the shareholder. But it is stakeholder rules at work. A stakeholder is any entity that is affected by the company’s activities. The Business Roundtable , a lobbying group, in 2019 shared commitments that each stakeholder is essential whether employees, customers, suppliers, community or shareholders. It is legally settled that the duties of the board and the management is owed to the shareholders, primarily. However, since the last 10 years, it is no longer the case as the law has moved on . It appears that interests of all stakeholders have to be taken into account , particularly in the UK if not elsewhere. How much time should a CEO commit to each stakeholder? It would depend on the issue faced . Shareholders are met annually, during the usua...

Have you watched Simon Sinek's TED Talk "Start with Why"?. If not, I recommend that you google it - the message is simple and powerful. After the Board has established the company's Purpose-Vision-Mission-Values framework, the company then needs to enact this purpose. I learnt recently of the Enacting Purpose Initiative which is a partnership between the University of Oxford, the University of California Berkeley, Brighthouse (a BCG company), Federated Hermes, WLRK and the British Academy. Through this initiative, I was introduced to the SCORE framework – a governance tool for enacting the purpose within the corporation. This is how the SCORE framework helps the company link its purpose to actions and outcomes- Simplify: Make your purpose simple and convincing Connect: Make sure your purpose connects with practice Own: Boards need to own their company’s purpose Reward: Incentivise and track purposeful behaviour Exemplify: Tell great stories about your pu...

Times have changed from those shareholder primacy days of Milton Friedman in the 1970s, to stakeholder capitalism in the 2020s. This change did not occur overnight, and was bound to happen. It is neither CSR nor philanthropy, but purpose that speaks to its core. The idea today is that the corporation would profitably provide solutions to the world’s and society’s problems. And the corporation is now asked what is the reason it exists? What is your corporate purpose? I have learnt to ask this of the CEOs of the companies I serve. This is your raison d’etre, and it has to be within the context of society. How does the company serve societal purpose or is relevant to society? Hmmm, a far cry from profit maximization for shareholders of my youthful AMP days. Today a company needs to strike a balance between shareholder-ism and stakeholder-ism in order to understand corporate sustainability. It is a nuanced concept – the question begs can a company persist indefinitely, viably, in...