Corporate Law & Governance Update: February 2019
There is a notable increase in governance discourse on the relationship of corporate purpose to sustainable revenue growth, in the context of changing social and political structures.
Prominent thought leaders such as Laurence Fink and Martin Lipton are emphasizing the “inextricable link” between corporate social purpose and profit. According to Mr. Fink, a company that truly understands and expresses its corporate purpose is more likely to function with the discipline that will produce long-term profitability. His 2019 letter to corporate CEOs continued his emphasis on the need for corporate leadership to focus more on the social and environmental needs of the regions and communities a company serves.
Mr. Lipton advises that concepts of social responsibility and environmental/social/governance criteria in investments “are becoming mainstream governance topics that encompass a wide range of issues,” including, for example, “climate change, systemic financial stability, human capital management, worker retirement, supply chain labor standards, and consumer/product safety.”