Leveling The Playing Field: Can Corporate America Be Reformed?

Boeing. WeWork. Wells Fargo. Corporate outrages lead to CEO ousters. Even major industry groups say it’s time for reforms. Bernie Sanders and Elizabeth Warren have appealed to voters who believe the game is rigged. Can big business see beyond the bottom line?

Nell Minow, vice chair of ValueEdge Advisors. (@nminow)

Peggy Foran, chief governance officer and corporate secretary of Prudential Financial. (@Peggyforan)

Fortune: "One Bright Spot in the WeWork Debacle: Turns Out Investors Actually Care About Corporate Governance" — "If anything good has come from the disastrous WeWork IPO controversy that has been raging since its S-1 filing in mid-August and ended yesterday with co-founder and CEO Adam Neumann stepping down, it is this: the investing public looked closely at serious corporate governance lapses—not just the company’s financials—and deemed them too big a risk to invest at lofty private valuations.

“'In the past, we had companies like Google and Facebook going public with big governance red flags, and everybody said, Well, that’s a feature, not a bug. That’s what you get with a founder-led entity,' says corporate governance expert Nell Minow, Vice Chair of ValueEdge Advisors. 'But now it seems the market is understanding the risks of poor governance particularly with some of the self-dealing in this company.'”

Financial Times: Opinion: "Directors have a duty to look beyond their shareholders" — "The stakes for responsible corporate governance and investor stewardship have never been higher.

"Recognising this urgency, the Business Roundtable, a large group of US chief executives, last month embraced a broader view of governance and urged companies to focus on sustainable value creation. Yet, as directors of American corporations seek to answer these calls, they remain subject to countervailing market pressure to deliver outsized shareholder returns over short periods of time.

"Directors need support to mediate this challenge and make responsible long-term corporate decisions. My law firm has long argued for a stakeholder-centred model of corporate governance rather than rote application of the 'shareholder primacy' model. Investors and the asset managers who represent them share with the rest of society an interest in sustainable prosperity.

"Our 'New Paradigm' seeks to rethink corporate governance as a collaboration among shareholders, directors, managers, employees, customers, suppliers, and the communities in which corporations operate."

Washington Post: "What to watch for now that CEOs have rewritten the purpose of the corporation" — "The Business Roundtable packed a lot into its headline-grabbing 300-word statement Monday, listing the various stakeholders chief executives should commit to serving, acknowledging Americans deserve 'a life of meaning and dignity' and ditching more than two decades of dogma that shareholders should always come before everything else.

"But the statement also offered sparse detail on how those commitments would change behavior in the future, what shifts in policy or practices the public should now expect or how success in a stakeholder-driven approach to capitalism might be measured.

"Presidential candidates, commentators and others all called on CEOs to explain how they would meet the commitments of the statement, in which the group representing nearly 200 chief executives of large companies updated how it views the purpose of a corporation."