This paper argues that Australian corporations are shifting away from traditional business metrics towards stakeholder values and that in doing so they are allowing personal or political agendas to take precedence over profitability. It calls for greater accountability in corporate governance and a reconsideration of the role of management in addressing social issues. 

The author argues that the promotion of political and popular causes that may be antithetical to the interests of corporations’ shareholders poses a serious risk to corporate governance and in turn to the economy. In particular, the paper argues that the requirement that employees and board members of publicly listed companies meet standards of diversity, equity and inclusion (DEI) disadvantages them in the market, where they compete against organisations basing their decisions on merit alone.

Key points

• A focus on stakeholder values allows personal agendas to take precedence over profit.
• DEI practices are non-competitive and disadvantage listed corporations.
• Corporations' fiduciary duty to shareholders should be a higher priority than a perceived social duty to stakeholders.
• Unincorporated businesses and private equity are not held to the same standards of activism, giving them an advantage.
• Fewer corporations will be incorporated in order to avoid the burden of externally-imposed corporate activism.
• Corporate activism has not been shown to have a significant positive effect on the corporation or its shareholders.