From Stockholders To Stakeholders

Thanks to Scott, Sarah and Francisco for their recent and thoughtful piece on the growing dichotomy between ESG and directors' duties. The article reminds me of the debate handily summarized by the title of this piece which is a challenge to the 1970's theory of Milton Friedman, that a corporate's "greatest responsibility lies in the satisfaction of the shareholders", in other words, a director's sole duty is to maximise profit. (Which is perhaps how we ended up with the Wolf of Wall Street...)

Statutory duties

As highlighted in the article, the legal duties of directors in the UK, Australia and Delaware are clearly not limited to the generation of profit and are arguably extending to climate related risks and governance.