Beyond the Bottom Line: Reclaiming Governance for Good

This week we explore how aligning governance structures with long-term purpose can unlock more resilient and regenerative economic systems. Our featured article highlights The Shareholder Commons, where Rick Alexander argues that business as usual — even when well-intentioned — fails to address structural threats like climate change and inequality. By pushing for a systems-first investment approach, Alexander calls on institutional investors to recalibrate fiduciary duties around environmental and social stability.

Across our Essential Reads, we see this shift gaining traction globally. From B Lab’s revamped certification standards to new frameworks for AI, innovations across many sectors focus on embedding accountability and transparency at every level of business operations. These cases collectively illustrate how purpose-centered models are reshaping what effective governance looks like today.

In our Research Corner, insights from the Academy of Management Review offer practical frameworks to help organizations govern multi-stakeholder collaborations. By applying Nobel Laureate Elinor Ostrom’s design principles, the study helps leaders navigate the real-world challenges of building trust and shared value across boundaries.

Let’s delve into how governance and purpose are redefining corporate responsibility in a complex world.

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Featured Article:

In this Forbes article, “When ‘Doing Good’ Isn’t Enough: The Shareholder Commons Shapes Proposals That Push Business To Prioritize People And Planet,” I explore how The Shareholder Commons is shifting the conversation around sustainable capitalism. At the heart of the piece is Rick Alexander’s critique of “doing well by doing good” — a notion he believes falls short of confronting the systemic crises of climate change and social inequity. Instead, Alexander proposes a model rooted in universal ownership theory, where institutional investors consider the health of the entire economy, not just individual companies.

The Shareholder Commons has advanced over 20 shareholder proposals urging firms to adopt governance practices aligned with broader environmental and social goals. Their approach encourages “beta stewardship,” where investors vote not only based on a company’s return but on its systemic impact. The piece offers insights into a growing effort to align fiduciary duty with the health of people and the planet — suggesting a necessary recalibration of the financial system itself.

Read more: When ‘Doing Good’ Isn’t Enough: The Shareholder Commons Shapes Proposals That Push Business To Prioritize People And Planet

Essential Reads:

Raising B Corp Standards

Global NGO B Lab, the organization behind the B Corp certification has unveiled new standards that emphasize holistic impact management across key areas including climate action, environmental stewardship, fair work, diversity and more. Companies must show continuous progress, aligning governance with purpose and stakeholder interests, setting a new global benchmark for sustainable business leadership.

Read more: Updated B Corp standards mandate ongoing environmental and social progress

Adapting Governance for BANI

This article urges boards to evolve governance strategies for a brittle, anxious, nonlinear, and incomprehensible (BANI) world. It highlights the need for holistic leadership transformation, focusing on adaptive CEOs, collaborative C-suites, dynamic stakeholder engagement, and emotional resilience. Companies that embrace systemic change will thrive, while those clinging to outdated models risk failure.

Read more: Navigating BANI Challenges: An Action Plan for Boards

Stakeholder Impact on Accounting

This study explores how state-level constituency statutes, which prioritize broader stakeholder interests, lead to decreased accounting conservatism in firms. By offering legal protections to employees, customers, and suppliers, these statutes lessen the need for conservative financial reporting, ultimately fostering a more stakeholder-oriented corporate environment and redefining modern corporate governance practices.

Read more: Stakeholder Orientation and Accounting Conservatism: Evidence from State-Level Constituency Statutes

Purposeful Business Leadership

Andrew Davies, CEO of B Lab Australia and Aotearoa New Zealand writes in The Post urges businesses to hold firm on sustainability and diversity commitments amid rising scrutiny and political pressure. Highlighting strong evidence that purpose-driven companies outperform peers, he emphasizes moral leadership, systemic change, and collaboration to build a resilient, equitable economy in a challenging world.

Read more: Businesses should stand firm as diversity and eco-friendly practices come under attack

Redefining Governance with AI

Sanjiv Mehta highlights how artificial intelligence and stakeholder-centric thinking are reshaping corporate governance. He stresses the need for ethical AI oversight, stronger regulatory enforcement, diverse and independent boards, and authentic sustainability practices. Mehta calls for a shift from compliance-based governance to values-driven leadership that aligns profitability with purpose.

Read more: AI, multi-stakeholder focus to redefine corporate governance, says Sanjiv Mehta

AI Governance Challenges

This article examines how AI startups like OpenAI and Anthropic face "amoral drift"—a gradual shift from prosocial missions toward profit—despite innovative governance models. It argues that focusing only on shareholder risks overlooks powerful "superstakeholders," such as employees and tech giants, whose profit-driven influence may undermine AI safety efforts.

Read more: Amoral Drift in AI Corporate Governance

Research Corner:

This Academy of Management Review paper explores how to solve collective action problems in stakeholder collaboration. Bridoux and Stoelhorst apply Elinor Ostrom’s design principles to compare governance models—hub-and-spoke, lead role, and shared governance—and assess how each supports joint value creation. The study deepens our understanding of stakeholder theory by highlighting practical governance strategies for fostering cooperation beyond firm boundaries.

Read more: Stakeholder Governance: Solving the Collective Action Problems in Joint Value Creation

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The regenerative business practices and sustainability innovations highlighted in this week's Regenerative Insights directly tackle the critical issues of corporate responsibility explored in my recent book explored in my recent book, The Profiteers: How Business Privatizes Profit and Socializes Cost.

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Quick Takeaways:

• New B Corp standards: Align with science-based targets and stakeholder impact.

• Purpose under pressure: Stay firm on sustainability and equity.

• Stakeholder statutes matter: Influence corporate reporting behaviors.

• Boards in BANI era: Embrace adaptive, resilient leadership.

• AI needs values: Guide governance beyond compliance.

• Superstakeholder risk: Watch profit-driven shifts in AI firms.