2017 Fourth Quarter
'Maximizing Prosperity & Freedom'
By Eve Tahmincioglu

Is our world out of balance?

That question came from Rebecca Henderson, a professor who teaches the “Reimagining Capitalism” course that’s part of the Harvard’s MBA program. She was a keynote speaker at the recent National Association of Corporate Directors summit where she gave directors a greater-good reality check.

As a professor of budding MBAs, Henderson told the crowd she’s taught students in the past to maximize profits above all else.

But today, she said, we’re facing a great transition from a world where businesses were concerned with “self and profits,” to “maximizing prosperity and freedom.”

Henderson offered directors a framework on how markets maximize prosperity and freedom for all:

  • Externalities are properly priced or controlled: Firms can’t deliberately poison the local water supply.
  • There is genuine freedom of opportunity: Everyone has access to a basic level of education and healthcare.
  • Competition is genuinely free and fair: The rule of law is upheld and firms can’t bribe the government to write the rules in their favor.

The 4th quarter issue of Directors & Boards delves into environmental, social and governance issues, or ESG. Senior editor April Hall takes on the difficult question of whether directors should be thinking beyond the bottom line. While some directors were willing to take on this topic, the vast majority of board members she reached out to were reluctant to speak about ESG issues.

Special Report

Read More

Shareholders Forced to Consider Social Good

ESG’s  Knocking on the Boardroom Door

Connecting ESG, Strategy  and Long-Term Performance

Big investors are pushing directors to care about ESG, but is it part of their fiduciary responsibilities?

“Directors must seek to promote the value of the corporation for the benefit of its stockholders. It is, of course, accepted that a corporation may take steps, such as giving charitable contributions or paying higher wages, that do not maximize corporate profits currently. They may do so, however, because such activities are rationalized as producing greater profits over the long-term,” wrote Leo E. Strine, Jr., a former chancellor of the Delaware Court of Chancery who is now chief justice of the Delaware Supreme Court, in a Wake Forest Law Review article titled: “Our Continuing Struggle With the Idea That For-Profit Corporations Seek Profit.”

It’s a struggle we see intensifying.

Our recent issue of Directors & Boards also takes on other hot topics, including Snap’s mega IPO and how its new stock structure will undermine investors, corporate governance and the courts; and the rise in well-funded activist investor campaigns and a company’s best defense against them.

And to the question of whether our world is out of balance, Harvard’s Henderson answered her own question on stage: “Of course it is.  Are you crazy?”

Hopefully our coverage fosters more sanity.


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  • 'Maximizing Prosperity & Freedom'
    Published January 19, 2018
    By Eve Tahmincioglu
    Is our world out of balance?That question came from Rebecca Henderson, a professor who teaches the “Reimagining Capitalism” course that’s part of the Harvard’s MBA program. She was a keynote s ...