The Handbook of Board Governance, 3rd Edition

20Shareholders, Stakeholders, and Tangible and Intangible Capitals

James E. Nevels, AB, MBA, JD, LLM

Chair, Business Council for International Understanding, and Director, WestRock

In the more than three decades of my corporate board service as a chairman, interim chief executive officer (CEO), committee chair, and board member, I have seen an evolution from a single-minded focus on shareholder value to the need to consider and embrace other constituencies and interests. The emergence of diversity, equity, and inclusion (DEI), and environmental, social, and governance (ESG) now dominate the discussion in boardrooms including the publicly traded corporate boardrooms in which I have sat in the past and the Fortune 500 company on whose board I currently sit.¹

The purpose of this chapter is to provide a backdrop as to how and why this broadened corporate focus has occurred and can and will only expand in the future. The corporate focus on DEI and ESG by their definition broadens the boardroom’s discussion to expand corporate responsibility to include not just shareholders but others—defined herein as “stakeholders.” In addition, the broadened view of corporate responsibility has encouraged corporations’ officers and board members to recognize the importance of financial and so-called intangible assets and capitals. The present and future, unlike the past, will see a focus on ESG ...