The Board That Embraced Stakeholders Beyond Shareholders
Atlas Copco’s board quietly takes a stand on sustainability.
Originally published on MIT Sloan Management Review
by Robert G. Eccles and Tim Youmans
What would it look like for the board of directors of a major corporation to consider, in a meaningful or material way, stakeholders beyond its shareholders? To be sure, many have argued that companies ought to look beyond their shareholders. But the specifics about what that would like have remained an exercise in speculation. Until now.
To the best of our knowledge, Atlas Copco — a Swedish industrial products company with 10.9 billion euros in 2015 revenues — has become the first listed company whose board of directors has made an explicit statement identifying a significant connection between its business goals and the well-being of stakeholders other than its shareholders, or what we call a “Statement of Significant Audiences and Materiality.”
Atlas Copco’s Statement appears on page eight of the company’s 2015 Annual Report. Note that it is both brief — just one half-page in their annual report — and clear about their commitment.
