The Board That Embraced Stakeholders Beyond Shareholders

What would it look like for the board of directors of a major corporation to consider, in a meaningful or material way, stakeholders beyond its shareholders? To be sure, many have argued that companies ought to look beyond their shareholders. But the specifics about what that would like have remained an exercise in speculation. Until now.

To the best of our knowledge, Atlas Copco — a Swedish industrial products company with 10.9 billion euros in 2015 revenues — has become the first listed company whose board of directors has made an explicit statement identifying a significant connection between its business goals and the well-being of stakeholders other than its shareholders, or what we call a “Statement of Significant Audiences and Materiality.”

Atlas Copco’s Statement appears on page eight of the company’s 2015 Annual Report. Note that it is both brief — just one half-page in their annual report — and clear about their commitment.

Atlas Copco is registered in Sweden and is legally governed by the Swedish Companies Act (2005:551). This act requires that the Board of Directors governs the company to be profitable and create value for its shareholders. However, Atlas Copco recognizes going beyond this, extending it to integrating sustainability into its business creates long-term value for all stakeholders, which is ultimately in the best interest of the company, the shareholders and society. The significant stakeholder audience, as outlined in the Atlas Copco Business Code of Practice, includes representatives of society, employees, customers, business partners and shareholders.

The Business Code of Practice is the central guiding policy for Atlas Copco, and is owned by the Board of Directors. Its commitment goes beyond the requirements of legal compliance, to support voluntary international ethical guidelines. These include the United Nations International Bill of Human Rights, International Labour Organization Declaration on Fundamental Principles and Rights at Work, the ten principles of the United Global Compact, and OECD’s Guidelines for Multinational Enterprises.

Atlas Copco has employed a stakeholder driven approach in order to identify the most material environmental, human rights, labor and ethical aspects for its business. These priorities guide how the Group develops and drives its business strategy, as its roadmap to support the UN Sustainable Development Goals.

The strategic pillars and priorities presented on pages 6–7 all aim at continuously delivering sustainable, profitable growth for the Group.