Renowned sustainable business expert Stuart Hart recently discussed his new book, Beyond Shareholder Primacy: Remaking Capitalism for a Sustainable Future, in a detailed interview. Hart, a Professor in Residence at the University of Michigan’s Erb Institute for Global Sustainable Enterprise and founder of several sustainable business programs, emphasized the importance of understanding historical cycles of capitalism to drive productive change. He traced three cycles of capitalism, highlighting shifts in objective functions and motive forces over time.
The conversation also delved into organizational interventions to address current environmental and societal challenges, criticizing traditional win-win logic that has underpinned global sustainability efforts for decades. Hart provided examples of companies like Griffith, Novelis, and the Long Term Stock Exchange, showcasing how corporations can adopt societal purposes and drive change within their organizations.
Further, the discussion touched on Hart’s passion for business school reform, focusing on reinvention rather than attempting to integrate sustainability into existing MBA programs. Hart shared his journey in designing sustainability-focused programs at the University of Vermont and the University of Michigan’s Erb Institute, emphasizing the need for a new approach to education and training in sustainable business practices.
Hart also highlighted the importance of understanding historical contexts and developments in shaping today’s economy and business philosophy. Through examples like the vision of Adolph Berle and Gardiner Means in the 1930s, he emphasized the potential for different approaches to corporate governance, moving away from the current era of shareholder primacy towards long-term value creation and stakeholder-centric models.
The interview also explored the concept of corporate quests, drawing on examples like Novelis’ transformation into the first aboveground mining aluminum company. Hart discussed the challenges of engaging the entire company in embracing sustainability goals and long-term strategies, pointing to the importance of internal alignment and organizational change to drive meaningful transformation.
Lastly, the discussion turned to the Long-Term Stock Exchange as an institutional innovation aimed at rebalancing the short-term focus of public equity markets. Hart underscored the need for a new consensus on value creation, moving away from quarterly earnings growth as the primary driver of stock prices towards long-term objectives and stakeholder value considerations. Through examples and insights, the conversation provided a comprehensive overview of key themes in Hart’s book and his vision for a sustainable future.
