Some business leaders sided with Ford. In the 1920s, General Electric Chairman Owen Young said that in addition to paying a “fair rate of return,” companies had obligations to workers, customers, and the public. Later General Electric leader Jack Welch became an advocate for shareholder value. However, in the wake of the 2008 financial crisis, he later told the Financial Times that shareholder value actually “the stupidest idea “Your main stakeholders are your employees, your customers, and your product.”
Jennifer Howard Grenville, professor at the University of Cambridge’s Judge Business School, said the conflict between creating value for shareholders and serving wider stakeholders tends to be particularly acute amid social change. says that there is The 2008 financial crisis was one of them. The climate crisis is another factor, she says.
conflicting request
How should CEOs balance the realities of climate change with the pressures of the anti-awakening? Some business leaders counter that there is no contradiction in the long run. . Paul Polman, who was Unilever’s chief executive from 2009 to 2018, argued that the future of consumer groups is inextricably linked to the future of the planet. Unilever has been around for over 100 years, he said. in speech year after taking office. It also needed far-sighted shareholders to survive for centuries. To those who don’t, Polman said, “Don’t throw money at our company.”
All was well until Kraft Heinz withdrew its bid in 2017, forcing Polman to make an immediate bid. Unilever stock price boosts Through cost reductions, dividend increases, and share buybacks. The problem with Polman’s strategy is that many investors and lenders want money quickly, if not now. Stuart Kirk, former Global Head of Responsible Investment at HSBC Asset Management, said: last year’s speech That led to his resignation. “What do people think is the average loan term at a big bank like ours, HSBC?” Six years. What happens to Earth in Year 7 is really irrelevant to our loan books. “
Georg Kell, chairman of financial technology group Arabesque, claims to be the originator of the ESG label. He is the founder of the United Nations Global Compact, which in 2004 launched an effort to “better integrate environmental, social and corporate governance issues in wealth management, brokerage services and related investigative functions”.
