Directors' characteristics to redefine the role of business

Abstract

This study posits that market capitalism as a whole, despite the promising global economic growth patterns and prospects, is subject to a set of factors, referred to as system disruptors, which are gradually eroding its benefits and growth possibilities and eventually will compromise the entire system functioning. The World Bank, the UN, global business leaders and scholars alike, all seems to agree that the present state remarks a distinctive upward leap with respect to a situation of mere economic recovery. This means that, while systemic weaknesses that contributed to the 2008-2009 financial crisis have been more or less efficiently mitigated, as we move on from a state of recovery to one of more stable growth there is room to address those matters that still hinder a balanced and sustainable development along economic, social and environmental dimensions. The first chapter of this research is focused on presenting the building blocks of the market capitalist model to then delineate a general overview of the current state of global economy. Then, it moves on to discuss system disruptors and their actual and potential negative impacts on the model. Next, a possible course of action is suggested in order to mitigate their effects while reinforcing the global market system itself. Specifically, in the second chapter, it is assumed that it is a duty of business companies, not just of governments or NGOs, to play an active role in defining long-term sustainable strategies that will enable their survival in the first place, while reinvigorating a weakened and unstable system and thus pushing the whole model onwards. To do so, it is required to break down those system disruptors into simpler and more directly addressable business challenges to be dealt with effectively by business firms. In this sense, I selected just those areas of interest more directly related to dimensions under a company’s control, and therefore can be translated into proper business challenges. The third chapter expands these assumptions by suggesting that, for business firms to be able to face those challenges by planning and implementing sustainable strategies, first there needs to be awareness of the issue, followed by strong goal alignment between owners, management and stakeholders.This alignment can and must be achieved, supported and communicated through the core governance body of a company: the board of directors. Drawing from a quite recent body of literature on the subject, it is assumed that the way boards are structured has a direct effect on business performance. In line with this logic, a set of directors’ characteristics are identified as fundamental for such businesses in order to identify the risks caused by system disruptors and planning sustainable long-term strategies.