2013 Kellogg School of Management/Aspen Institute Business and Society Conference

"Rethinking 'Shareholder Value' and the Purpose of the Corporation"

  • The world is changing in profound ways. This new paradigm means full participation across the public, private and nonprofit sectors.

    Sally Blount ’92, Dean, Kellogg School of Management

  • Sometimes corporations say, "We have a fiduciary responsibility to our shareholders." And I answer, "You have a fiduciary responsibility to your shareholders not to be stupid."

    Daniel Diermeier, IBM Professor of Regulation and Competitive Practice, Kellogg School of Management

  • If power corrupts, and absolute power corrupts absolutely, I would suggest that unlimited money has the power to corrupt absolutely, and [corporations] ought to stay away from it.

    Russ Feingold, Former U.S. Senator

  • Henry Hansmann, a Professor of Law at Yale Law School, delivered a talk titled, "Is the corporation capable of reflecting the views of a disparate set of stakeholders?" He discussed "Industrial Foundations," a non-profit structure that controls a company.

  • From our experience, the main focus is pursuing profitability. The law allows for the pursuit of other purposes, but the main focus is profitability and growth. Changing that focus … is not a small undertaking.

    Dwight Hutchins, Global Managing Director for Strategy in Public Service, Accenture

  • Integrity is a mountain with no top, so we had better get used to climbing.

    Michael Jensen, Emeritus Professor of Business Administration, Harvard Business School

  • Activists don't view corporations as an object of change, but a platform for change to get people to listen and talk about ideas so we can make progress as a society.

    Brayden King, Associate Professor of Management and Organizations, Kellogg School of Management

  • I keep it very simple: Do the right thing, be very open and surround yourself with people who have similar values.

    Harry Kraemer, Clinical Professor of Management and Strategy, Kellogg School of Management

  • Meaning and shared purpose matter deeply. Clear purpose provides a basis for institutional values.

    David Langstaff, President and CEO, TASC Inc.

  • In a panel discussion on Friday moderated by columnist Steve Pearlstein, panelists addressed the question, "Does the legal structure of the corporation shape or constrain the corporation’s objectives?" Panelists were Bernie Black (Kellogg and NU Law); Donna Dabney (The Conference Board); Bart Houlahan (B Lab) and Dwight Hutchins (Accenture).

  • Friday morning, panelists discuss the role of corporations in lobbying and influencing policy. From left: Robert Weinberger (Aspen Institute), Lynn Stout (Cornell Law), Martin Redish (NU Law), Nell Minow (GMI Ratings).

  • Working closely with local communities is an important feedback loop for us [at Waste Management].

    Susan Robinson, Director of Federal Public Affairs, Waste Management Inc.

  • An MBA is the portal to networks that reach enterprises, to do things that can't be accomplished by working alone.

    Judy Samuelson, Founder and Executive Director, Aspen Business and Society Program

  • When a company is not run with the proper internal controls, [there may be] unintended consequences.

    Paola Sapienza, Merrill Lynch Capital Markets Research Professor, Kellogg School of Management

  • There's a distortion within the governance system, so that the behavior that's coming out of the corporations is not the behavior that the people running those organizations really wants. We don't need to change the people; we need to change the systems they're operating in and the information they need to disclose.

    Lynn Stout, Professor of Corporate and Business Law, Cornell University

  • The Internet has made it easier to pose certain questions. There is the opportunity for shareholders to ask for more feedback from corporations.

    Luigi Zingales, Professor of Entrepreneurship and Finance, University of Chicago Booth School of Business

Yale Law School Prof. Henry Hansmann (L) spoke at the two-day conference moderated by Kellogg Prof. Nicola Persico Yale Law School Prof. Henry Hansmann (L) spoke at the two-day conference moderated by Kellogg Prof. Nicola Persico.

Thinking about "shareholder value"

The tension between shareholder and stakeholder value offers no easy answers. But the Kellogg-Aspen Conference, held March 7-8, created stimulating discussions with experts — and an engaged audience — who looked at the problem from all sides and were sometimes surprised to find themselves agreeing with those on the other side of the fence. This is what the Kellogg Public-Private Initiative is dedicated to: leading the discussion. We invite you to follow along by viewing related content on this page, including complete videos of each speaker and panel.

Nicola Persico
Professor of Managerial Economics& Decision Sciences
Faculty Director, Kellogg Public-Private Initiative

Sheila Duran
Director, Kellogg Public-Private Initiative

Conference Videos

Highlights from "Rethinking ‘Shareholder Value’ and the Purpose of the Corporation," the Kellogg School of Management/Aspen Institute Business and Society Conference: March 2013.
Former Senator Russ Feingold (WI) gives keynote: The Corporate Role in Campaign Finance and Pressure from Politicians for Contributions. March 7, 2013.
Corporate Speech: The Role of Corporations in Lobbying and Influencing Policy. Moderator: Jesse Eisinger; Panelists: Martin Redish; Robert A. Weinberger; Lynn Stout; Nell Minow.

View all Videos »

Couldn’t make Aspen? Here are some highlights

These days, corporate America is doing some soul-searching. Are corporations really only accountable to their shareholders? And, if so, should they be? Over the course of the Kellogg-Aspen Conference, a number of our faculty lent their expertise. We’ve rounded up some of the highlights on the Kellogg Insight blog with comments from professors Diermeier, King, Kraemer, Black and Sapienza. Read More

Financial Times: Kellogg research shows more to CSR than meets the eye
In a recent article, Financial Times writer Della Bradshaw wrote, “Does CSR make money? It is one of the questions that divides the academic world. Those that promote CSR — corporate social responsibility — argue that it improves the bottom line through brand reputation and more productive employees. Those against, say that shareholder value should be the driving force for business. “The latest research from the Kellogg School at Northwestern University suggests that neither argument gets to the whole truth.” Read more.

Triple Pundit: Does CSR Make a Difference to a Company’s Image?
For many companies these days, corporate social responsibility or CSR, is an important part of their corporate profile. Companies like Hickory Springs, with its Earthcare Challenge, and Starbucks Coffee, known for its support of safe drinking water in impoverished communities, are examples of companies that have successfully built CSR into their corporate image. But is "doing the right thing" enough to ensure a positive legacy? Read more.

Related articles From Kellogg Insight

The strategy of corporate social responsibility
Executives who seek to maximize the impact of CSR investments should reexamine their entire approach: how it fits into overall strategy, the ways in which it can deliver value, how to measure its impact, and the best way to communicate progress to stakeholders.

The following Kellogg Insight articles are part of a larger discussion on the public-private interface that took place at the Kellogg-Aspen Conference.

Being Smarter with CSR
An increasing number of companies are embracing corporate social responsibility, but many struggle with how to ensure CSR serves their business strategy. Kellogg faculty offer compelling insight that can help companies understand the strategic implications of CSR efforts. Read more.

Pinpointing the Value in CSR
Does CSR increase shareholder value? Recent research finds that, on average, expenditures in corporate social responsibility activities reduce shareholder value, even though these expenditures are associated with positive stock returns. This apparent inconsistency suggests that executives should reexamine the conventional wisdom on CSR initiatives. Read more.

When and How to Drive Real Value with CSR
Mounting evidence suggests corporate social responsibility is no magic bullet for economic value creation. But executives can improve their bottom lines by using CSR in targeted circumstances. Read more.

Managing the Reputational and Market Risks of Social Activism
Companies that invest in CSR hoping to improve their reputation often make themselves bigger targets for protesters. By understanding how social activism affects financial performance, executives can develop better responses. Read more.

The Hidden Drivers of Corporate Sustainability Initiatives
While top management can influence their companies’ agendas, new research suggests that the real drivers of agenda issues are hidden within everyday interactions across the organization. “Issue intrapreneurs” play a central role in mobilizing support across units and functions. Read more.