Changing paradigms in corporate governance: new cycles and new responsibilities

Abstract

Purpose – The purpose of this paper is to trace the evolution of corporate governance through a series of changing paradigms in response to wider transformations in the political economy, business and society. The different eras of governance, and the dominant theoretical and practical paradigms are highlighted. In a context where the adequacy of the dominant paradigms of corporate governance is increasingly challenged, the search for coherent new paradigms is a vital task in corporate governance. Design/methodology/approach – This paper is a conceptual analysis of evolving paradigms in corporate governance. Findings – To meet the imminent challenge of social and environmental sustainability in a post-carbon economy, further rethinking of corporate purpose, corporate governance and directors duties will be essential. This sustainability revolution has only just commenced, but in the course of the twenty-first century, it will transform both business and society. Research limitations/implications – The implications of the research concern the importance of conceptualising corporate governance through different eras and paradigms, and appreciating that further paradigm shifts will occur in response to transformations in the political economy and ecology. Practical implications – This paper informs on the importance of the transformation of business purpose and objectives in response to the imminent dangers of environmental and social collapse. Social implications – This paper emphasises the social and environmental dimensions of corporate activity, and how these must be considered in the definition of wealth generation. Originality/value – The contribution of this paper is to focus upon the increasing integration of corporate governance and corporate sustainability, and how this is essential for the reformulation of corporate purpose and objectives.

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