Broadening corporate responsibility: is maximizing shareholder value alone a good enough long-term strategy?
Whashington D.C. is drowning in paper. Congress has voted on proposals to promote corporate responsibility. Meanwhile, the President, executives and activists are all scurrying about in search of additional proposals to make executives more accountable for their companies financial reports. The hope is that new reporting requirements and auditing rules will reassure global investors. These efforts are laudable, but they will prove insufficient. Given that capitalism today is global as well as local, the U.S. must work with its allies to write international corporate governance norms. But we need to use this opportunity to think more broadly about how to reassure global economic confidence long term. All of the reform efforts to date focus on a narrow definition of corporate responsibility. As President Bush acknowledged in his July 9th speech, “There is no capitalism without…
