Putting competing shareholder and stakeholder interests on an equal footing risks hampering board decision-making, says ecoDa report.
A body representing business directors across Europe has called for a more nuanced viewed of “stakeholder” business models saying boards should not be forced into becoming “bargaining bodies” for competing interests which could handicap their ability to make decisions.
The view comes from ecoDa, the European association of directors institutes, in a submission to a report from the EU’s SMART Project, an initiative designed to find reforms that would make corporate activity within the EU more sustainable.
In its own report on the issue, ecoDa suggests the project’s approach to balancing shareholder with stakeholder interests
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What began as a response to corporate scandal, corporate governance is making great strides in driving leadership accountability in Europe—but it’s still a work in progress, with views and policies differing considerably.