As touched upon in Chapter 1, contemporary commentary on corporate governance can be divided into two main approaches: stakeholder primacy, and the narrower shareholder primacy. This chapter focuses on the first of these objectives. We commence the chapter by pointing out that an approach that accentuates the differences between a shareholder versus a stakeholder theory of the corporation is probably a contradiction and a false dichotomy. We then deal with the important aspect of corporate social responsibility (‘CSR’) and the related issue of disclosure of and reporting on non-financial matters. As part of this discussion we focus on the controversial and highly topical issue of companies exaggerating their image as environmentally friendly corporations (greenwashing) to please investors and to attract more investments, as well as smartening their image on other issues (greenscreening). This chapter then looks at the ‘social licence to operate’ before shifting to CSR and directors’ duties. The chapter concludes by considering the meaning of ‘stakeholders’ and how all corporate stakeholders have vested interests in the sustainability of corporations.

Since at least 2018 there has been a major shift within ‘Business America’ away from ‘shareholder capitalism’ towards ‘stakeholder capitalism’, a move which has already had some global impact. Our approach is, however, realistic and we also make the reader aware of the challenges for countries, particularly where shareholder primacy is deeply embedded in statutory law and case law, to move from shareholder primacy to an all-inclusive stakeholder model of corporate law and corporate governance. In this chapter we extract some of the ‘essential’ principles of corporate governance and illustrate that there is a ‘business case’ for good corporate governance. We conclude the chapter by discussing broader trends and debates with a present and likely future impact on corporate governance. These include what can be described as the ‘Fourth Industrial Revolution’; the widening gap between the ‘rich’ and the ‘poor’, or, put differently, ‘the price of inequality’; the growing problem regarding profit-sharing or capital distribution in large public corporations; and a short discussion of the so-called ‘Great Reset’.

In this chapter we establish the foundations for extracting principles of contemporary corporate governance. We begin the chapter by providing our own definition of the term ‘corporate governance’. The reason for this is to enable the reader to gain a good understanding of how we approach the principles of contemporary corporate governance in this book. We have adjusted the definition of corporate governance in each of the previous four editions, as well as in this edition. The reason is that corporate governance is a dynamic concept and we strive to keep the definition updated to reflect contemporary principles of corporate governance.

Providing medical care during a mass event requires important situational awareness and preparation. Significant planning and relationship building provides a foundation for creating an operational outline, and establishing crowd dynamics and expectations for related medical activities. Collaboration with stakeholders will provide insight into the operations of various other event management entities, and allows for more seamless operations during the event. Once an operational plan has been established and circulated, the event medical team can be prepared for the expected external and crowd conditions and respond appropriately, while maintaining vigilance for any emergency that may arise. Contingency planning is key for the medical team to have appropriate emergency response defaults. Special attention is also needed on communications strategies for real-time intel, information dissemination, and crowd management. Once the event reaches its end, it is important to establish stand-down procedures to be followed as the crowd disperses to ensure an orderly event closure. After action reports can provide valuable insights for future crowd management.

This chapter explores the intersection of transnational law with contemporary corporate governance laws and principles. Corporate governance, with its complex array of public and private actors, fits naturally within the modern concept of transnational law as a species of law that "can no longer be viewed through a purely national lens." Financial markets today are global and interconnected and events, such as the 2007-2009 global financial crisis and the COVID-19 crisis, exemplify the risk of contagion across those markets. Not only can corporate governance problems transcend national boundaries, so too can their solutions, which often involve regulatory efforts that operate at a transnational level. The chapter explores, from a transnational perspective, the transmission of laws and norms that are designed to constrain directors’ conduct and enhance corporate accountability. It focuses on two key examples of such accountability mechanisms-fiduciary duties and corporate codes. The chapter examines, for example, the global transmission of corporate governance and shareholder stewardship codes. These codes, which are a relatively recent phenomenon, play an important role as “norm creators.” The chapter assesses the transmission of laws and norms against the backdrop of convergence and path dependence theories of corporate governance.

As scholars and activists seek to define and promote greater corporate political responsibility (CPR), they will benefit from understanding practitioner perspectives and how executives are responding to rising scrutiny of their political influences, reputational risk and pressure from employees, customers and investors to get involved in civic, political, and societal issues. This chapter draws on firsthand conversations with practitioners, including executives in government affairs; sustainability; senior leadership; and diversity, equity and inclusion, during the launch of a university-based CPR initiative. I summarize practitioner motivations, interests, barriers and challenges related to engaging in conversations about CPR, as well as committing or acting to improve CPR. Following the summary, I present implications for further research and several possible paths forward, including leveraging practitioners’ value on accountability, sustaining external calls for transparency, strengthening awareness of systems, and reframing CPR as part of a larger dialogue around society’s “social contract.”

The chapter argues that socially responsible investment (SRI) can be linked to long-term financial success and therefore should be part of the corporate social responsibility (CSR) strategy of investors. It shows how capital providers, including ordinary shareholders, institutional investors and socially responsible investors, can provide the stimulus for improvements in CSR standards and performance. The chapter traces the origins of SRI and investigates the range of powers and responsibilities, procedures and opportunities that can be applied to encourage a greater degree of participation of different kinds of investor, particularly institutional investors, in SRI.

This chapter focuses on the critical corporate governance role of outsiders providing professional advisory services in promoting corporate social responsibility (CSR). It draws on insights from responsive regulation and institutional theories to make the case for including professional advisory services such as accounting and auditing firms, management consultancies, rating agencies, external company secretaries, and public relations, advertising and marketing firms in the CSR legal infrastructure. Proposing an inclusive and limited stakeholder approach, the chapter outlines creative ways for enabling the CSR responsibility, accountability and transparency of professional advisory services.

This chapter argues that ‘stakeholder needs’ and the ‘value system paradigm’ are alternative approaches to regulating corporate social responsibility (CSR). Drawing on Pound’s Theory of Social Interests and the institutional and stakeholder theories, it highlights the importance of contextualism in CSR and demonstrates that a values system paradigm may be a more suitable regulatory strategy, particularly in the developing and emerging markets. The chapter suggests that the stakeholder needs approach should be coupled with a values system paradigm for a more effective CSR when stakeholder responsiveness is desired.

This chapter argues that beneficiaries of social enterprises should be given decision-making powers. I examine two problems with restricting the decision-making powers to shareholders, that is, shareholders can exercise the governance rights to benefit themselves but at the expense of the constituencies that the social enterprise is set up to benefit; and it is odd for a social enterprise to claim that it seeks to pursue social welfare and to promote public benefit, and yet its beneficiaries have absolutely no say in how the social enterprise is being run. I then analyze three objections in giving beneficiaries decision-making powers, that is, it will be disruptive and inefficient; beneficiaries can act opportunistically; and only shareholders have the incentive and ability to monitor. Finally, I assess five different decision-making mechanisms, that is, beneficiary advisory panel; director appointed from the beneficiary advisory panel; appointing independent nonexecutive directors; beneficiaries as shareholders; appointing a regulator and public enforcement.

This book contributes to the literature on comparative social enterprise law in four respects. First, it demonstrates that the existing legal forms and laws in common law Asia, the UK and US, do not properly address the three principal types of conflicts of interests affecting social enterprises. Second, this book distinguishes social enterprises and profit-driven companies that take into account sustainability or environmental, social and governance (ESG) considerations. Third, given the key difference between social enterprises and profit-driven but socially responsible companies, the concern that having a new legal form for social enterprises will undermine the sustainability practices of profit-driven companies is misplaced. Finally, creating a new legal form comprising the five criteria will reduce transaction costs for social entrepreneurs, investors, and consumers.

In this chapter, we examine the role of NGO activism as a driver of sustainability. Such activism offers opportunities and poses challenges to firms; examining the role of activism is important to appreciate the broader question of what makes businesses more sustainable and more socially responsible. We provide an overview of what activist NGOs are and explore ways by which they seek to influence corporate policies, ranging from collaboration and partnerships to contestation and protest. We then discuss which firms are more likely to encounter NGO activism as not all firms are equally susceptible to NGO activism. Firm size, industry and visibility to consumers are important elements, as well as their historical record on CSR and sustainability issues. Finally, we discuss how firms may respond to NGO activism. For a firm to take responsibility implies that it moves beyond the defence of its own economic interests, to consider the questions of what kind of corporation the firm wishes to be, what role in society it aspires to fulfil and how to relate to its various stakeholders. Ultimately, these are questions of ethics.