The role of corporate boards has never been more important, nor subject to as much scrutiny, as it is today. The technological, environmental, geopolitical, and socio-economic transformations of the past two decades are driving a re-examination of the prevailing corporate-governance model, just as they are posing fundamental challenges to many areas of public policy and governance.
In particular, these transformations are making environmental, social, governance, and data stewardship (ESG&D) considerations increasingly important to companies' financial performance and resilience. This broad change is eroding the traditional distinction between a shareholder-primacy model (which focuses on financial and operational costs and benefits) and a stakeholder-driven model (focused on environmental and social risks and opportunities).
Issues previously considered secondary for CEOs and boards - matters once handled by companies' stakeholder-relations, philanthropy, and information-technology departments - have become important determinants of firms' capacity to create and sustain economic value. For example, climate change, water management, and other aspects of environmental stewardship are increasingly recognised as bottom-line issues in a world where technology, regulation, and other features of the operating environment can change quickly.
Similar challenges apply to the management of intangible assets - a key source of competitive advantage in the Fourth Industrial Revolution. The...