A must see short video interview with Bob Eccles, Harvard Professor, great friend and fellow facilitator for UN Global Compact Board Program – and John Authers, the Senior Investment Commentator of the Financial Times. The title of the video is“Deciding what matters”
In this video Bob surprises the highly regarded @FTVideo interviewer John Authers with the fact that Boards do not have a legal responsibility to privilege the interest of shareholders over others. As Bob points out
what the law says all over the world is that the Fiduciary Duty of a Company Board of Director is to the company itself as a legal person – and it should take into account shareholders and other stakeholders it can under the business judgement rule in what it believes to be the interest of the corporation.
This does not mean that the Board has stakeholders other than than shareholders into account. What Bob is asking for is transparency via a “Statement of Significant Audiences and Materiality” so that ALL stakeholders – including the shareholders – can make choices based on what the Board of Director find is the priorities for the corporation.
I see this as a simple but very important topic for the Board to discuss. Who are our main stakeholders and what is material to the business and the significant audience? This question is key to any strategy discussion and worth answering before starting the process of an integrated report or a sustainability report.