Changing trends, risks and demands necessitate changes in response. Michael Volkov asserts that boards must shift to a broader approach, replacing a single-minded focus on profits with measured consideration of the interests of a wide range of stakeholders.
Corporate boards are under increasing attack by investors, shareholders and the public. In the aftermath of corporate legal train wrecks – such as Wells Fargo, Volkswagen Emissions, General Motors, JPMorgan, 1MDB – and increased demand for sustainability, ESG and other shareholder public policy objectives, corporate board members have a significant target on their backs.
Corporate governance is at a critical juncture. The old-line, New York law firm classic boardroom legal defense efforts will continue, but clinging to corporate law principles (while well-settled) ignores the impact of a fast-growing trend and desire for accountability. In these circumstances, the New York corporate lawyers will continue to earn their large fees, engage in protracted defense litigation and ultimately slow down the pace of change.
Such a narrow, but lucrative view of corporate board governance, however, ignores the fast-growing trend demanding change and innovation. The rise of young corporate leaders will demand change, and eventually the law itself will be subject to…
