IESE ECGI CONFERENCE ON CORPORATE PURPOSE: Can Purpose Deliver Better Corporate Governance?

• Published date: 01 June 2021
• Author: Colin Mayer,Luigi Zingales,Patrick Bolton,Sophie L'Helias,Bengt Holmström,Paul Polman,Claudine Gartenberg,Caroline Flammer,Rebecca Henderson,Jordi Gual,Baroness Denise Kingsmill,Juvencio Maeztu,José Viñals,Jordi Canals,Marco Becht
• Date: 01 June 2021
• DOI: http://doi.org/10.1111/jacf.12456

IN THIS ISSUE:

Sustainable

Financial

Management

VOLUME 33

NUMBER 2

SPRING 2021

APPLIED

CORPORATE FINANCE

Journal of

8Enlightenment Environmentalism: A Humanistic Response to

Climate Change

Steven Pinker, Harvard University

24 Corporate Resilience and Response to COVID-19

Alex Cheema-Fox, Bridget R. LaPerla, and Hui (Stacie) Wang, State Street Associates; and

George Serafeim, Harvard Business School

IESE ECGI CONFERENCE ON CORPORATE PURPOSE

41 SESSION I: Are Corporate Statements More an Verbiage?

Speaker: Colin Mayer, University of Oxford and ECGI;

Discussant: Luigi Zingales, University of Chicago

50 SESSION II: Company Valuation and the Eects of ESG Factors

Speaker: Patrick Bolton, Columbia Business School and ECGI;

Discussant: Sophie L’Hélias, President LeaderXXchange and Co-Founder of ICGN

60 SESSION III: Corporate Purpose and the eory of the Firm

Speakers: Bengt Holmström, MIT and ECGI; Paul Polman, former CEO of Unilever and co-founder of Imagine

70 SESSION IV: Corporate Purpose, Ownership, and Performance

Speaker: Claudine Gartenberg, University of Pennsylvania; Discussant: Caroline Flammer, Boston University

78 SESSION V: Unpacking the Purpose of the Corporation

Speaker: Rebecca Henderson, Harvard Business School;

Discussant: Jordi Gual, Chairman of CaixaBank

86 SESSION VI: How Should Boards of Directors Deal with Corporate Purpose?

Speakers: Baroness Denise Kingsmill, Non-Executive Director of Inditex and IAG; Juvencio Maeztu,

Deputy CEO and CFO of INGKA (IKEA): and José Viñals, Chairman of Standard Chartered

95 A Deeper Look at the Return on Purpose: Before and During a Crisis

Greg Milano and Riley Whately, Fortuna Advisors; and Brian Tomlinson and Alexa Yiğit,

CEO Investor Forum at CECP

112 ESG in Emerging Markets: e Value of Fundamental Research and

Constructive Engagement in Looking beyond ESG Ratings

Mark Mobius and Usman Ali, Mobius Capital Partners

121 Capital Allocation and Corporate Strategy: An Examination of the

Oil & Gas Majors

Andrew Inkpen, Michael H. Moffett, and Kannan Ramaswamy, Arizona State University

Paul Polman

Co-Founder and Co-Chair of

IMAGINE and the former

CEO of Unilever

Colin Mayer

University of Oxford and ECGI

Patrick Bolton

Columbia Business School and ECGI

Rebecca Henderson

Harvard Business School

Jordi Canals

IESE Business School

Bengt Holmström

MIT and ECGI

Luigi Zingales

Chicago Booth and ECGI

Sophie L’Helias

President LeaderXXchange and

Co-Founder of ICGN

Jordi Gual

Chairman of CaixaBank

Marco Becht

ECGI and Université libre de

Bruxelles

IESE ECGI CONFERENCE ON CORPORATE PURPOSE

Can Purpose Deliver Better Corporate Governance?

October 28-30, 2020

42 Journal of Applied Corporate Finance • Volume 33 Number 2 Spring 2021

ROUNDTABLE

as Jordi has already said, corporate

governance now occupies center stage.

We first had codes, then the OCD

principles, then the emerging markets

and global nancial crisis, and today

we are talking about corporate gover-

nance, which really means the future

of capitalism and the role of business

in soci ety.

I’ve always found it a pleasure

to work with IESE because of the

outstanding professionali sm of its sta.

Not only does Felix Sánchez do excel-

lent work but, nomen est omen, it takes

a bit of luck as well as hard work to run

a conference with 1,700 participants.

And let me close by thank ing Jordi and

everybody at IESE for their e orts.

Canals:ank you very much, Marco,

for your kind words. It is a pleasure to

work with you and your colleagues at

ECGI. And on behalf of Marc o and the

conference academic committee, let me

provide a brief overview of the topics

and sessions of the next three day s.

Our rst session, which will begin

in a few minutes, will be led by Profes-

sors Colin Mayer and Luigi Zingales.

Colin will present a paper on how

serious corporate purpose statements

promote better corporate governanc e.

In our second session, later this

afternoon, Professor Patrick Bolton

of Columbia University will present

valuation models that ta ke externalities

such as carbon emissions into accou nt.

Patrick’s paper will be discussed by

Sophie L’Helias, a well-known investor

and President and Founder of Leaders

for Change.

In our third session, Bengt

Holmström, MIT Professor and 2016

Nobel Laureate of Economics, will

present his thinking on how purpose

can be incorporated in contemporary

Vanessa Koenig, for their outstanding

work. I also want to thank the Social

Trends Institute, its chairman Carlos

Cavallé, and its executive director,

Tracy O’Donnell, for their support of

this conference. e Strategic Ma nage-

ment Society, whose scholars are closely

following de velopments around corpo -

rate purpose is another very important

partner in this c onference.

And with that, I’ll stop and invite

Professor Marco Becht from ECGI to

say a few words. Marco, the oor and

screen are yours.

Marco Becht:Thanks, Jordi. I am

Marco Becht, a professor of Finance

at the University Libre de Bruxelles

and the executive director of the Euro-

pean Corporate Governance Institute,

or ECGI. We have had a long-stand-

ing connection with IESE. Jordi was a

member of the ECGI board for many

years, and in 2008 he hosted the 2008

ECGI Annual Meetin g at IESE’s brand

new state-of-the-art Executive Teaching

facility in Barce lona.

ECGI is a global network compris-

ing about 300 of the world’s leading

researchers in economics, finance,

and law, with a strong interest in

corporate governance. More gener-

ally, ECGI serves as a bridge between

academic research, corporate practice,

and policymak ing. We have more than

600 members. ECGI is financed by

membership dues, contributions, and

donations. And our two largest donors

currently are BlackRock and Investor

AB, the holding company controlled by

the Wallenberg Fou ndations.

The roots of ECGI go back to

1996, when corporate governance

was practiced by a few investors and

studied by some academics or, colloqui-

ally speaking, a bunch of geeks. But,

Jordi Canals: Good afternoon, I’m Jor di

Canals and, on behalf of the ECGI

and IESE Business School, I want to

give you a very warm welcome to this

conference on corporate purpose. Our

working title is: Can purpose deliver

better corporate governanc e?

When we started planning this

conference with our colleagues at

ECGI in May 2019, we were already

convinced of the importance of c orpo

-

rate purpose and how it could change

the underst anding of corporate g over-

nance. In the 18 months since then,

our beliefs have been strengthened

by the Business Roundtable State-

ment on the purpose for corporations

and multi-stakeholder management

in August 2019, and by the World

Economic Forum manifesto in s upport

of multi-stakeholder management a

few months later.

Unfortunately, we have also seen

the onset of COVID-19, which has only

made clearer the importa nce of environ-

mental impacts and the soc ial impact of

companies. In just the past few weeks,

we’ve had several debates about share-

holders and stakeholders, inspired in

part by the 50th ann iversary of Milton

Friedman’s article in TheNew York

Times on the primac y of shareholders.

We look forward to contributing to

the debate on corporate purpose during

this conference. e subject of corpo-

rate purpose and governance has been

studied by scholars from ma ny dierent

academic disciplines, includi ng organi

-

zational economics, corporate nance,

strategic management, and corporate

law. More than 1,700 people have

registered for this conference, includ-

ing a number of corporate CEOs. And

I would like to start by thanking my

ECGI colleagues, pa rticularly Professor

Marco Becht, Elaine McPartlan, and