25 July 2024
Held on 24 July, this event was a conversation on the corporation and governance that explored the relevance of Inclusive Capitalism to Aotearoa New Zealand. It was jointly hosted by the Aotearoa Centre for Leadership and Governance and Juncture: Dialogues on Inclusive Capitalism Centre in the Decima Glenn Room of the University of Auckland Business School.
The dialogue on “Governance for Inclusive Capitalism” explored the concept of the corporation and its role in shaping inclusive capitalism. There was no clear consensus on what a corporation truly is, with perspectives varying across disciplines. Professor Susan Watson suggested that the corporation might be understood differently depending on one’s viewpoint, while Dr Jonny Hardman emphasized the corporation as both a source of and subject to rights.
The discussion began by tracing the historical evolution of the modern company, highlighting its roots in municipal and ecclesiastical corporations, eventually influenced by the State or Crown. The conversation then shifted to the moral character of companies, with both Hardman and Watson agreeing that companies are neither inherently good nor bad, but rather are shaped by how they are operated. They acknowledged that companies can contribute to both positive and negative societal outcomes.
The panellists also debated the reconciliation between the company’s legal status as an artificial person and its focus on shareholders. Hardman argued that companies exist separately from shareholders but act in their interests due to legal rights. Watson, however, suggested that shareholders might not be essential to the company’s operations, questioning why companies should operate solely for shareholder benefit. When asked about the future of corporations, Watson indicated ongoing research into potential alternatives, while Hardman suggested that the future likely lies somewhere between the extremes of current shareholder wealth maximization and more inclusive models.
The session also touched on regulation, the potential end of capitalism, and the concept of inclusive capitalism, exploring whether it should be incremental or revolutionary. Barriers to inclusive capitalism were identified as entrenched interests and a lack of willingness to rethink the system. The session concluded with reflections on leadership, governance, and the potential for change within companies and capitalism, especially in the context of New Zealand’s unique cultural landscape.
The dialogue included audience participation, with robust questions from the audience including:
- Based on your conceptualisation of the company, how would you define corporate purpose? And do you think corporate purpose has the potential to shift us towards inclusive capitalism?
- If companies continue to solely focus on creating value for shareholders, will we actually be able to have continuous growth on our finite planet?