Paul Druckman discusses the meaning of value creation

In this video Paul Druckman discusses the complexity of changing the capital market system given diverse stakeholder interests and the approach that corporate boards should take to the governance of ESG issues in light of the VW scandal.  He responds to criticisms by some academics that the International Integrated Reporting Council (IIRC) has moved away from its original commitment to address sustainability issues.

Paul argues that:

  • the IIRC is trying to change the behaviour of the capital market system a change which includes, but is not limited to, increasing the focus on social and environmental sustainability issues;
  • many elements of creating value, such as brand value, IP, your people, customers, are missing ingredients in a capital market system;
  • what the IIRC is doing is the best way to embed Environmental, Social and Governance (ESG) issues into the capital markets.

And in relation to VW:

  • Boards should have a discussion about the purpose of the firm;
  • where sales are dependent on low emissions boards should consider the validity of the data and the approach;
  • Boards should challenge the accuracy of carbon related data.

shutterstock_332237495This is the second in a series of Durham University Business School video interviews with Paul Druckman.  In later videos Paul talks about: the role of corporate reporting in providing better information to investors; the role of Business Schools in raising awareness about changes in the business and reporting context; and, the future of corporate reporting. The first video discussing Paul’s interest in social and environmental sustainability issues, their relevance to business and their place in the training of accountants can be seen here.

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