ESG, Corporate Governance & Future of the Firm

Why is nonprofit ownership gaining traction in the U.S., with companies like OpenAI and Patagonia mirroring long-standing models in Europe, such as Novo Nordisk and IKEA? In new research, Ofer Eldar and Mark Ørberg unpack the economic rationales behind nonprofit business ownership, challenge the idea that it’s all about purpose, and highlight the overlooked risks of nonprofit control.

Despite individual investors being strongly divided on environmental, social, and governance (ESG) issues, corporate policies are largely determined by large institutional investors that adopt predominantly moderate ESG stances. In new research, Nicola Persico and Enrichetta Ravina explore this disconnect by examining the mechanisms driving the moderate ESG positions of major financial institutions and investigating potential impacts of allowing individual investors to select their own proxy voters.

After public backlash, OpenAI has abandoned plans to restructure to remove control by its nonprofit entity. ProMarket reviews the history of OpenAI’s internal tensions to pursue profits over its founding purpose, artificial intelligence for the benefit of humanity, and what questions remain after the firm’s retreat.

Rose Chan Loui explains the current controversy surrounding OpenAI’s decision to abandon its nonprofit status. To learn more about OpenAI’s proposed restructuring, what it means for the race to develop artificial general intelligence, and how it highlights the tricky legal concept of a nonprofit’s “purpose,” listen to Chan Loui’s recent appearance on Capitalisn’t.

Lawrence A. Cunningham reviews the arguments over Delaware’s recently signed Senate Bill 21, which changes corporate governance law in the state in favor of corporate management, and discusses what developments may come next.

A future of business may be businesses owned by charities; they have a history of commercial success and social good. The following is an...

Sarah Haan writes that to understand American authoritarianism, it’s less useful to analyze the strategies of elected dictators around the globe than to look at how corporate leaders in the United States have rigged corporate democracy.

In new research, Jitendra Aswani and Roberto Rigobon find that investments raised on sustainable bond markets force firms to make material changes to corporate...

David J. Teece and Aurelien Portuese argue that short-term thinking in American corporate governance, antitrust, and regulation is hampering American innovation and success even as other countries invest in their firms to dominate frontier markets.

A new study by Zwetelina Iliewa, Elisabeth Kempf and Oliver G. Spalt finds that Americans often prioritize moral values over financial gains when evaluating...