“The earth does not send invoices, but one day it will collect interest – with compound consequences..Governance is the conscience of capitalism.. when conscience is outsourced, greed becomes policy and negligence becomes culture.. ”

–  Douglas Boateng

“Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals.. to align as nearly as possible the interests of individuals, corporations and society..”

–  Adrian Cadbury    

“Governance and leadership are the yin and yang of successful organisations. If you have leadership without governance, you risk tyranny.. if you have governance without leadership you risk atrophy..…”

Mark Goyder

We see ESG as another key driver for Our Endeavours related to the Betterment of the Humanities.

We believe the greatest importance of ESG lies in that it plays a very important role in terms of ensuring that that enterprises would take into account their corporate responsibilities towards the environment, the society and their stakeholders while working on creating wealth which shall help to drive and sustain what we see as a virtuous cycle between “the market” and what the 1991 Nobel Prize laureate in Economics Ronald Coase and people in the institutional school of economics would call “the firm” which should mean all entities operate under the visible hands and thus would encompass the government and many other entities in addition to the private enterprises.   

Such perspective is derived from the insights of Adam Smith who is the first one in history who discovered and articulated on the power of the market. And we think it is very important to state from the very outset that Adam Smith himself never take the view that the Market is perfect or omnipotent like what many subsequent economists or at least the economics models developed by them seem to have thought. 

Indeed, if one read carefully into Adam Smith’s writings, he clearly thinks that there are roles that have been performed by the visible hands like the government and he is well-awared of many potential pitfalls in the Free Market institutional structure. In our opinion, Adam Smith always has at the back of his mind the ways in which a virtuous cycle can be created between The Free Market as well as the Government and broader society it has to work with.  In retrospect, Adam Smith seems to have put more emphasis on the roles of government and tax, importance of justice, impartial spectators, sympathy etc while Ronald Coase has put all these things under the category of “The Visible Hands or the Firm” and the conventions of the Market.

That said, we would argue that some kind of virtuous cycle between the Market and the Firm has been an issue that Adam Smith has been mindful of all along, and our work related to ESG are revolving around the virtuous cycle that can be created by enterprises serious about invesing in ESG. We also believe that other than the environment, one key aspect of ESG should be the city/ country; the communities/ districts they operate as well as the shareholders/ staff they are facing with which constitutes thee major aspects of “The Market” facing them. As such, apart from global climate and the broader importance of a green and sustainable physical environment, we also see the cities/ countries; districts/ communities; staff/ industry as also constituents of “the Market” faced by companies, whether they are public or private.

* Ronald H. Coase was the 1991 Laureaute of the Nobel Prize in Economics. Coase has arguably opened up a “Pandora Box” in Economics in that he has asked two very profound questions : i) what is the Nature of the Firms and ii) what is the role of property right s and transaction cost in the free market process. It is, however, “pandora box” in quote because the things that are coming out of the box is not entirely evils but also hopes about a much better and sophisticated understanding of how to get the free market to work most effectively. Incidentally, according to the Greek mythology, other than evils, there was also hope inside the original Pandora Box.