S is for stakeholders, not shareholders: the shift in board responsibility

The hot subject right now is corporate governance, or lack thereof (ahem, banks). Questions have been raised on the role of boards and what exactly is their responsibility to stakeholders (not just shareholders).

A couple of interesting developments in this discussion: APRA's independent report into the Commonwealth Bank's governance, culture and accountability; and the ASX Corporate Governance Council's consultation paper on its Corporate Governance Principles and Recommendations.

The common message in the APRA report and ASX paper is that boards must have regard to the views and interests of a broader range of stakeholders than just shareholders. This principle is arguably already part of the law, but it is very clear that community expectations are shifting strongly in that direction.