A model of sustainable corporate governance

Develay, Etienne ORCID: https://orcid.org/0000-0003-4396-841X and Giamporcaro, Stephanie (2024) A model of sustainable corporate governance. In: The 84th Annual Meeting of the Academy of Management, 9 August 2024 - 13 August 2024, Chicago, USA.

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Abstract

The field of corporate governance has traditionally been divided between the shareholder and stakeholder models. However, the increasing societal demand for information on corporate sustainability is challenging these established models as it drives the dissemination of information to a wider range of stakeholders and emphasises the necessity to take ecological limits into account. In response to this challenge, this paper proposes an adaptation of the stakeholder-agency theory with a strong sustainability approach to serve as a foundation for an integrated corporate governance model aligned with sustainable development. This sustainable corporate governance model expands the definition of stakeholders to include future generations and non-living entities. It recognises the resources supplied by stakeholders as different forms of capital that must be preserved and reimbursed, and it advocates for the minimisation of their utility losses within ecological limits. Finally, the paper explores how these adaptations redefine six fundamental assumptions of traditional corporate governance models and discusses their implications for a sustainable corporate governance model.