The Missing Link: The Role of the Board of Directors in Shifting from Shareholderism to Stakeholderism

Since the Business Roundtable Statement on the corporate purposeCorporate Purpose (Moran Ofir/Tal Elmakiess) (Ido Baum/Jarosław Bełdowski) in 2019 there is a growing debate on the increased attention to environmental, social and governance (ESG) policies. The need for a more socially inclusive approach to corporate governanceCorporate Governance (Dawn Zaiter) (Ido Baum/Jarosław Bełdowski) (Mariusz Jerzy Golecki) is certainly growing but many scholars challenge the reliability of commitments to ESG goals by corporate leaders. This chapter underscores the importance of the board of directorsBoard of directors (Ido Baum/Jarosław Bełdowski) in this context and in inducing change. The board is the main organ in the corporation that needs to transition from a shareholder-centric perspective to a broader stakeholder-driven view of corporate decision making. Given the centrality of the boardroom in stewarding the corporation, the study reveals that too little is known about whether directors can shift from a shareholder- to a stakeholder-centric approach. Using lessons from behavioural economicsBehavioral economics (Ido Baum/Jarosław Bełdowski) the study raises doubts regarding the ability of boards to do so. We argue that further research is required to understand how to foster it in a reliable way.