From “Courtroom” to “Extended Boardroom”

The boardroom has traditionally been the place where interests are weighed in a constructive manner. These days, we are seeing more and more cases where even the courts are called upon to force companies to weigh those interests differently. Is this a positive development?

Due to the Corporate Governance Code and the CSRD and CSDDD legislation, companies are required to report on an increasing number of ESG objectives throughout the entire supply chain. This takes a lot of time and money but forces companies to better balance short-term results with long-term objectives. This creates a better balance between a company’s own benefits, on the one hand, and healthcare for others and the future, on the other. These are matters that, incidentally, do not necessarily have to be in conflict at their core.

In addition to the Corporate Governance Code, we are also seeing the emergence of a kind of “Corporate Governance Trend.” Scholars such as Jan Rotmans, writers such as Rutger Bregman, environmental organizations such as Milieudefensie, and activists such as Extinction Rebellion are each, in their own way, focusing on the (accountability) agenda of companies. According to many, more public debate, more activism on highways and at shareholder meetings, and even more legal action are needed to challenge companies on sustainability. It’s understandable, but does this escalation actually work?

If we take a closer look at the historical writer Bregman, we see an interesting distinction between what works and what doesn’t. He invites, calls for action, posits, and provokes. There’s not much wrong with that in itself; social movements are often sparked by artists and writers.

However, due to its stigmatizing nature (“talent from the Zuidas is being lost”), its populist style (“us against the elite”), its exclusionary nature (“only people from the Zuidas can contribute”), and its tone of moral grandstanding (“my virtues are indeed virtuous”), Bregman’s call seamlessly turns into a judgment. And when it comes to judgment, legitimacy is important. In whose eyes are you—or are you not—contributing sufficiently to solving the world’s problems? Is that judgment up to a writer?

A legitimate judgment comes from a position of respect or merit. We are more likely to accept a judgment from someone who has deeply experienced the intrinsic, fundamental dilemmas of balancing competing interests—preferably with responsibility, Ownership, and results—than from someone on the sidelines.

Many responses to his book show that Bregman’s “battle of virtues” polarizes rather than bridges differences. And that is especially true for the activists listed above. The well-deserved attention they are calling for requires connection rather than outrage. Prof. Jan Rotmans does this better by bringing together different stakeholders as a guiding principle for transformation.

To counter polarization, I believe we need to return to the boardroom as the center of dialogue—with a much broader representation of stakeholders than before. That is where the deliberation and decision-making take place. Employee organizations, customer organizations, owners, climate organizations, …, deserve a seat at the table—provided they truly participate. No “single issues” or “sitting on the sidelines,” but a sincere dialogue about all interests and responsibility for the whole. Connection in the “extended Boardroom.” This is not an easy decision-making process—it’s a challenge for modern leaders. But then, at least, we will no longer need a Courtroom to achieve a healthy and sustainable balance.