Corporate Governance as Custodianship: Ensuring Business Model Sustainability

The article 'Corporate governance as custodianship of the business model' by Michael Page and Laura F. Spira, published in the Journal of Management & Governance in 2016, discusses the role of corporate governance in ensuring the long-term sustainability of a business model. The authors argue that corporate governance should be seen as a form of custodianship, where the board of directors acts as stewards of the company's assets and resources, and is responsible for ensuring that the business model is aligned with the interests of all stakeholders.

The article begins by discussing the traditional view of corporate governance, which focuses on maximizing shareholder value. The authors argue that this narrow focus has led to short-term thinking and a lack of consideration for the long-term sustainability of the business model. Instead, they propose a broader view of corporate governance, which takes into account the interests of all stakeholders, including employees, customers, suppliers, and the wider community.

The authors then introduce the concept of custodianship, which they define as 'the responsible management and protection of assets and resources for the benefit of future generations.' They argue that this concept is particularly relevant to corporate governance, as the board of directors has a fiduciary duty to act in the best interests of the company and its stakeholders, both now and in the future.

The article goes on to discuss the key elements of custodianship in corporate governance, including a long-term perspective, a focus on sustainability, and a commitment to transparency and accountability. The authors also highlight the importance of stakeholder engagement, noting that effective custodianship requires ongoing dialogue and collaboration with all stakeholders.

Overall, the article provides a valuable perspective on the role of corporate governance in ensuring the long-term sustainability of a business model. By emphasizing the concept of custodianship, the authors offer a framework for boards of directors to act as responsible stewards of their companies, and to consider the interests of all stakeholders in their decision-making.