IESE and ECGI were pleased to host the 2025 Corporate Governance Conference on the Shareholders’ Role and Responsibilities in Times of Corporate Disruptions, which took place on March 31, 2025, at the IESE Madrid campus.
Conference highlights
Corporate governance and boards of directors have been experiencing increasing complexity and uncertainty in a world of major geopolitical, technological, climate, and social disruption. This one-day conference featured six sessions by leading scholars, who shared the latest research and practical insights on these relevant topics:
• The nature and impact of different types of shareholders (i.e., institutional shareholders, pension funds, family offices, private equity) on governance effectiveness.
• The impact of different types of shareholders on helping companies deal with significant disruptions such as technology, sustainability, and polarization.
• The effects of different types of shareholders on board structure, composition, and long-term strategic decisions in an uncertain business context.
• The changing preferences of different types of investors on financial value creation and social value when there are trade-offs.
• Board engagement with different types of shareholders.
Finally, a panel discussion with distinguished board members provided insightful knowledge on the role of boards of directors and shareholders in promoting better governance and contributing to the firm’s ongoing transformation.
Delving into the conference theme
Corporate governance research and regulation have widely assumed that boards should maximize shareholder value and protect shareholders’ economic returns as their top priority. Recently, this view has been challenged in several ways.
First, companies are facing more disruptive economic and social environments. As a result, boards and management teams must govern and manage firms in a way that creates sustainable value.
In many cases, achieving this goal requires major, long-term investments in areas such as decarbonization, developing more resilient global supply chains, and deploying artificial intelligence. In facing these decisions, boards needed to gain shareholders’ support and ensure alignment with these policies. The nature of these investments also involved a different mix of risk, return, and time horizons.
The second challenge was that regulators, investors, and public opinion were advocating for important climate and social goals, in some cases, without a clear material connection to the firm. Notably, the increasing role of investors in supporting environmental and social objectives, whose impact on financial performance may not be immediately positive, was a relatively new development. Several central questions affecting shareholders were addressed: Should shareholders support pro-social policies, such as sustainability, beyond their material impact? Should shareholders pursue financial returns and decide afterward the social causes they want to support? Do companies that adopt purpose or pro-social policies do better financially?
The third challenge centered on the trade-off between short-term and long-term value creation, defining these different time horizons and understanding the implications they have for company valuation. This trade-off was acute in decarbonization decisions or reconfiguring the global value chain. The responsibilities of shareholders in confirming the time horizon were indispensable.
Along with these challenges, several positive changes were discussed in corporate governance.
The first was that many family-controlled firms were adopting international governance practices initially introduced by listed firms. In this respect, with additional disclosure and adoption of best corporate governance practices, family firms seemed committed to improving corporate governance. This was particularly relevant since investor families are the most important group of corporate owners in the world.
The second change was large institutional investors’ growing awareness of the need to constructively engage with boards of directors to help improve the long-term value creation process through better governance. The notion of stewardship adopted by some institutional investors was highlighted as a very promising avenue for improving the relationship between shareholders and boards of directors.
The third change was that private equity firms were adopting a more pragmatic mindset to help companies manage different transitions and transformations, including those related to sustainability, digital, and AI. This was particularly significant because private equity firms have become a major category of shareholders.
This IESE-ECGI conference explored the different perspectives, goals, and strategies of diverse types of shareholders in relation to the investments that companies need to consider for tackling major disruptions. When making decisions, shareholders needed to consider the goals they pursued, expectations they had about the companies they invested in, and the specific adoption of corporate governance mechanisms to monitor management and be forces of change.
In the end, responsible shareholders were shown to have the potential to generate long-term value sustainably, becoming stakeholders that not only care about their investments but also about the companies they invest in and their impact on society.
Please, feel free to watch the full conference here.