What is the proper role of a corporation? Is it solely to benefit its shareholders such as Milton Friedman argued in the 1970s? Is it a balancing act between its shareholders, board, management, and its “corporate social responsibility”? Is it for the general public benefit involving multiple stakeholders including, but not limited to, shareholders, employees, communities, and governments? These are among the most pressing questions facing corporations, investors, regulators and various stakeholder groups.
In recent years, investors and advocacy organizations have become more active in using corporate governance structures to affect business decisions on issues ranging from environmental protection to gun control to human rights. This trend, which shows no sign of abating, begs the broader question of the extent to which the private sector should engage on public policy issues, and more specifically whether the current corporate governance structure was designed to facilitate these activities. BPC’s Corporate Governance project explores these issues in an objective, bipartisan exchange of ideas.