Corporate governance and strategy in turbulent times

Margarethe Wiersema and Haeyoung Koo

Chapter 5 in Strategy in a Turbulent Era, 2024, pp 91-106 from Edward Elgar Publishing

Abstract: This chapter discusses how turbulent changes in the world have significantly transformed the corporate governance and strategic landscape for publicly traded companies. The rise of index funds - the Big Three - and activist investors signal a shift in the investor environment towards shareholder value maximization. Conversely, the societal prioritization of corporate social responsibility and the demand for ESG investing have motivated companies to redefine the purpose of the corporation away from shareholder primacy. The tension between a shareholder and stakeholder emphasis represents complex imperatives for the management and boards of publicly traded companies to strike the balance of addressing societal and investor expectations on ESG while maintaining value creation for shareholders. The dawn of this new era of corporate governance also presents both challenges and opportunities for management scholars with exciting avenues for future research.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2024
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