Governance thinking, even in the US, is moving. When we are providing consultancy to organisations, we need to be aware of this shift, and, as discussed in 'Collaborative Consultancy' able to make judgements about our ethical accountability to the organisation, its stakeholders, and to ourselves.
Some of the ideas, being based on US law, are not directly applicable everywhere, but the overall argument is, and it's crucial to the future.
The article stops short of a full description of the solution - which is fair enough, as it's seeking to illustrate the problem.
Outside the US, governance thinking has understood this for some time. The law in the UK, South Africa, and other places that have accepted the thinking found in the Cadbury Report, and the King Commission, is that Corporations are required to be good corporate citizens. Their duty is indeed not to maximise profit for shareholders, rather, their duty is to deliver value to all their stakeholders (and, of course, shareholders are a stakeholder, and returns are important to them).
Corporate governance, requiring that corporations deliver value to their stakeholders is a powerful principle, particularly when enforced through a 'comply or explain' method (not ticking boxes on a pro-forma 'have you complied with X' sheet).
What it means is that corporations have to understand who their stakeholders are - the inhabitants of Bhopal were stakeholders in Union Carbide, as they found out, most horribly. If Union Carbide had known that they were stakeholders, and known that it had a corporate duty, to make sure that there was no negligence at that site that could lead to such a disaster, then history would have been very different.
They then have to understand how their vision, mission and charter can deliver value appropriately to all their stakeholders.
Part of the difficulty, particularly for those who have only been aware of profit as a value, is understanding what stakeholder value is, and how to govern it.
A method, Service Governance, using existing best practice frameworks as a basis, exists to help identify stakeholder value, and govern that value, using the paradigm of a 'service' and governing the organisation through a service portfolio, optimising the value / cost ratio, for stakeholder value.
There's more on Service Governance here:
Adopting Service Governance - Governing Portfolio Value for Sound Corporate Citizenship
There is an example of Service Governance working, a short video, on the web-site www.service-governance.org
Adopting Service Governance - a short introduction (Video)
There are also blogs, discussing service governance here:
No comments:
Post a Comment