In this article and video published in Ethical Boardroom, I urge a much deeper discourse about #ESG and the structure of profit-seeking corporations – one that considers ways to install the right incentive drivers. As summarized in the video, in my article aliens from another planet (the Vilcans) visit Earth and advise us to think much harder about key questions that we are not fully grappling with – such as: 1) who is best able to assess ESG factors that affect sustainability? 2) does our system provide enough incentives for them to think 20 years ahead, but act now? Does it do that throughout the entire investment chain? 3) why does ownership need to be non-transparent much of the time? Is that healthy? 5) what are the implications of giving FULL limited liability to corporations? 6) does it make sense that those who bought no stock, bear a large part of externalized risk? etc. etc.
The article then describes exactly how the planet Vilcan reconfigured its equity markets to address a host of issues that current ESG initiatives and debates are not even referring to, including the fact that that our current incentives structures work essentially “backwards” and/or do not lead in the direction we need to proceed.
Please read the article, view the video, and let me know what you think. We need a deeper debate about these issues. You can send email to info@bdti.or.jp ,or comment below or on Linkedin, where you can join the “Japan Corporate Governance” group that I co-manage, or respond to my general post with the article. – Nicholas Benes