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How businesses can take a stand – and stick to their knitting

Corporate and M&A
Protest in Melbourne
In the context of the confused public debate around whether business leaders should weigh into contested social issues, partner Jeremy Lanzer says the law provides welcome clarity.

Writing in the Australian Financial Review, Jeremy says much of the commentary has conflated two interrelated but distinct questions.

“The first question concerns the extent to which boards of listed companies should consider the interests and expectations of those beyond their security holders,” Jeremy writes.

“The second question being tossed around over recent weeks by politicians, business leaders and commentators is whether it is legitimate for a director or an executive of a listed company to take a public stand on major social issues.”

Where boards and executives judge that it will contribute to the long-term business success and value of a corporation, Jeremy says the Corporations Act gives them ample scope to allocate value to stakeholders other than shareholders, and also to take up social causes.

“Rather than lecturing business leaders on who they should listen to and on what kinds of issues, commentators on different sides of this debate should simply refer back to the law to reassure themselves that the right checks, balances and obligations are already in place.”

Jeremy Lanzer, Partner

“Rather than lecturing business leaders on who they should listen to and on what kinds of issues, commentators on different sides of this debate should simply refer back to the law to reassure themselves that the right checks, balances and obligations are already in place.”

To read the full article, click here.

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