Boards in transition: Re-establishing corporate legitimacy

  • This article reports on research exploring how directors describe the tensions as they navigate emerging social and environmental issues, and broadening stakeholder responsibilities.
  • Underpinning these tensions is the importance of maintaining corporate legitimacy.
  • Corporations need both pragmatic and moral legitimacy strategies to navigate an increasingly contested operating environment.

Businessman peeking through white venetian blinds

A focus on a ‘social licence to operate’ and corporate culture, particularly in banking and finance, is on the rise as a decline in trust and reputation threatens the corporate legitimacy of the sector.

As the impacts from the Royal Commission into Misconduct in the Banking, Superannuation and Finance Sector continue, calls to address corporate culture and rebuild reputation and public trust centred on customers’ interests are steadily growing. How is this understood by senior business members and decision-makers ultimately responsible for the governance of their corporations?

How can seemingly competing interests underpinning corporate culture be realistically managed and how can these be communicated to the community to re-establish trust?

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