A Guide to the Big Ideas and Debates in Corporate Governance

Lynn S. Paine; Suraj  Srinivasan

Article | Harvard Business Review (website) | October 14, 2019

A Guide to the Big Ideas and Debates in Corporate Governance

Abstract

How corporations govern themselves has become a matter of broad public interest in recent decades. Amid this many commentators and experts still disagree on such basic matters as the purpose of the corporation, the role of corporate boards of directors, the rights of shareholders, and the proper way to measure corporate performance. The issue of how shareholder interests should be considered in corporate decision making is particularly contentious. This article is a resource for understanding today’s key debates around governance and identifying the main areas in which changes are being intended called for. Many readers are grappling with these questions now or may have to address in the near future; in any case, the debates are sure to affect how business operates across the globe.

Keywords: Corporate Governance; Mission and Purpose; Governing and Advisory Boards; Business and Shareholder Relations; Performance; Measurement and Metrics;

Format: Electronic

Citation:

Paine, Lynn S., and Suraj Srinivasan. "A Guide to the Big Ideas and Debates in Corporate Governance." Harvard Business Review (website) (October 14, 2019).

The case opens with Alain Bejjani, CEO of Majid Al Futtaim (MAF) Holding, anticipating on the Group’s next phase in the multi-year transformation journey and reflecting on the initiatives he implemented to create the Group’s growth-oriented culture. Founded in 1995, MAF Group was a regional conglomerate, operating shopping malls, and retail and leisure establishments across 12 businesses in 15 markets in the Middle East, Africa, and Asia. The case describes the series of structural changes that Bejjani undertook since he became the CEO in 2015, how he transitioned the Holding company from a passive investor to a strategic architect model, and assumed ownership of the brand, culture, and talent across the entire organization for all its operating companies: MAF Properties, MAF Retail, and MAF Ventures. The case discusses the steps that the Group undertook – creation of the Leadership Institute, a new performance management system, investments in digital technology and analytics capabilities, and the launch of the School of Great Moments to instill a focus on customer experience. By November 2019, Bejjani recognized that the organization had evolved considerably in the past five years. He wondered about the next steps in scaling and ability to execute strategy. How much more could he push the organization to continue to change?

Book | 2020

Capitalism at Risk: How Business Can Lead

Joseph L. Bower, Dutch Leonard and Lynn S. Paine

Who should take the lead in fixing market capitalism? Business—not government alone. The spread of capitalism worldwide has made people wealthier than ever before. But capitalism's future is far from assured. Pandemics, income inequality, resource depletion, mass migrations from poor to rich countries, religious fundamentalism, the misuse of social media, and cyberattacks—these are just a few of the threats to continuing prosperity that we see dominating the headlines every day. How can capitalism be sustained? And who should spearhead the effort? Critics turn to government. In their groundbreaking book, Capitalism at Risk, Harvard Business School professors Joseph Bower, Herman Leonard, and Lynn Paine argue that while robust governments must play a role, leadership by business is essential. For enterprising companies—whether large multinationals, established regional players, or small startups—the current threats to market capitalism present important opportunities. In this updated and expanded edition of Capitalism at Risk, Bower, Leonard, and Paine set forth a renewed and more urgent call to action. With three additional chapters and a new preface, the authors explain how the eleven original disruptors of the global market system clash with the digital age, and they provide lessons on how to take action. Presenting examples of companies already making a difference, Bower, Leonard, and Paine show how business must serve both as innovator and activist—developing corporate strategies that effect change at the community, national, and international levels. Filled with rich insights, this new edition of Capitalism at Risk presents a compelling and constructive vision for the future of market capitalism.

Keywords: Capitalism; business and society; Economic Systems; Economic Growth; Policy; Leading Change; Corporate Social Responsibility and Impact; Business and Community Relations; Corporate Strategy;

Citation:

Bower, Joseph L., Dutch Leonard, and Lynn S. Paine. Capitalism at Risk: How Business Can Lead. Updated and expanded ed. Boston: Harvard Business Review Press, 2020. View Details

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ISS is the world’s largest provider of corporate governance research, data, analytics, and voting services. The case uses the effort of the Securities and Exchange Commission (SEC) to impose an array of new regulations that would severely restrict the functioning of this company to help readers understand the role of proxy advisors and institutional investors in corporate governance. As ISS rose to prominence throughout the early 21st century, it became highly influential in enabling investors increase their ability to influence companies, managers, and board of directors. ISS had therefore become a lightning rod for controversy, and its detractors in corporate America had been seeking regulation to rein it in for years. The case walks readers through the history of this debate, the concerns of each stakeholder, and how they intersected with ISS’s approach to providing proxy advisory services. It describes in detail how ISS developed its shareholder voting policies, determined its vote recommendations for its clients, and executed their votes come proxy season. It also provides some detail about the outlook for ISS’s business in light of recent trends in capital markets and corporate governance.

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A Guide to the Big Ideas and Debates in Corporate Governance

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