Building Respected Companies: Rethinking Business Leadership and the Purpose of the Firm

Description

The current financial crisis has deep macroeconomic roots, but the dominant view of the firm has made the crisis deeper and more devastating. Over the past few decades, maximizing shareholder value has become the main objective of the firm. Chief executives have been keen on this objective because their economic incentives have been clearly associated with stock market performance. Unfortunately, this has driven many CEOs to make terrible decisions based on short-termism and greed. In this way, the firm has become the object of anger, criticism and cynicism. In Building Respected Companies, Jordi Canals argues that we must address this problem by developing companies that serve society, not just their shareholders. This requires a new perspective of what a firm is, what the purpose of the firm in society should be and what the role of the board of directors and senior executives should be.

Jordi Canals is the Dean and Professor of General Management at IESE Business School. His areas of interest are corporate governance, globalization and corporate strategy. He is the author of thirteen books, including Universal Banks (1996) and Managing Corporate Growth (2000). A Fulbright Fellow, he was a research fellow at Harvard Business School and a guest scholar at The Brookings Institution and the World Bank. He was also a member of the task force on corporate governance in Spain (2002-2003).

'A solid corporate reputation offers firms better growth and performance perspectives, and helps manage better current and future risks. This book offers a rich perspective on the role of chief executives in leading and developing corporate legitimacy, respect and admiration in society.' Cesar Alierta, Chairman, Telefonica 'The global financial crisis and related corporate turmoil provide a compelling case for rethinking the purpose of companies. This book will be useful not just for leaders on the verge of a crisis, but more importantly, for any business leader in search of inspiration on how to create respected, enduring enterprises.' Victor Fung, Chairman, Li and Fung Group 'We need business leaders with a long term view who help companies make a positive contribution to the common good of society and who clearly put character as the main criteria in the selection of good leaders. May the readers of this book contribute with their behaviour to positively change the business world.' Franz Haniel, Chairman, The Haniel Group and Metro Group 'Leadership must raise the aspirations of organizations and nurture their teams to deliver extraordinary performance. ... In this book, Jordi Canals brings out the essence of building a globally respected corporation and the role of leadership and governance in nurturing it.' Narayana N. R. Murthy, Chairman, Infosys Technologies 'I welcome this book because it explores the notion of corporate reputation and leadership both in a visionary and pragmatic manner. This is not just a theoretical issue: we all sometimes wonder what purpose we have and why we get up and go to work every morning.' Franck Riboud, Chairman and CEO, Danone 'This thoughtful book is no opportunistic response to recent events. Jordi Canals has been asking profound questions for many years: What exactly are companies for? How should CEOs be judged? Can short-term and long-term objectives be reconciled? Here he suggests sage and workable answers to these and other highly topical issues.' Sir Martin Sorrell, CEO, WPP