Global Agenda Council on the Role of Business

The World Economic Forum's Global Agenda Council on the Role of Business asserts that the traditional focus on maximizing short-term shareholder returns is inadequate for the 21st century. The report diagnoses the erosion of public trust and the pressures of 'short-termism' in financial markets as key challenges. It proposes a shift toward 'stakeholder value' models, recommending integrated reporting of non-financial metrics, the alignment of executive compensation with long-term goals, and tax reforms to encourage long-term investment. The document emphasizes that businesses must integrate sustainability and social development into their core strategies to maintain their 'license to operate' in an increasingly complex global environment.

• The traditional business model focused on maximizing short-term returns is insufficient, and companies must instead increase value for stakeholders while protecting the societal ecosystems in which they function.
• Public trust in corporations has declined significantly in developed markets, where businesses are often viewed as self-interested profit generators that ignore their societal and environmental impacts, a sentiment worsened by the financial crisis and issues like climate change.
• Financial market structures since the 1980s have pressured CEOs to prioritize quarterly revenues over long-term stability, transforming businesses from long-term investment repositories into collections of assets for short-term traders.
• The rise of state capitalism, particularly in Asian and Middle Eastern markets, allows state-owned enterprises to pursue longer-term strategies but can distort competition through government subsidies and access to capital.
• To improve transparency and accountability, the report proposes 'integrated reporting' that combines financial data with non-financial metrics regarding environmental and social impacts into a single publication.
• The report suggests reforming corporate governance by legally stipulating that the fiduciary duty of boards is to maximize long-term company value rather than short-term shareholder value.
• Specific financial and tax interventions are proposed to combat 'short-termism,' including implementing minimum share-holding periods for voting rights, introducing transaction fees on stock trades, and tapering capital gains taxes for long-term holders.
• The report advocates for the adoption of low-carbon technologies—such as hydrogen fuel, hybrid power, nuclear energy, and biofuels—to ensure the sustainability of the transportation and mobility sectors as activity is expected to double by 2050.

APA

World Economic Forum (2012). Global Agenda Council on the Role of Business. http://www3.weforum.org/docs/GAC/2012/WEF_GAC_RoleBusiness_Report_2012.pdf

Chicago

World Economic Forum. Global Agenda Council on the Role of Business. 2012. http://www3.weforum.org/docs/GAC/2012/WEF_GAC_RoleBusiness_Report_2012.pdf.

Wikipedia

{{cite report |author=World Economic Forum |title=Global Agenda Council on the Role of Business |date=March 2012 |url=http://www3.weforum.org/docs/GAC/2012/WEF_GAC_RoleBusiness_Report_2012.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldeconomicforum2012global, author = {{World Economic Forum}}, title = {{Global Agenda Council on the Role of Business}}, institution = {World Economic Forum}, year = {2012}, month = mar, url = {http://www3.weforum.org/docs/GAC/2012/WEF_GAC_RoleBusiness_Report_2012.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }