Value Preservation Increasingly Acknowledged as Primary Purpose and Fiduciary Duty

25 Pages Posted: 23 Mar 2021

Date Written: February 14, 2021

Abstract

Stakeholder groups appear to intuitively understand that logically the delivery of sustainable long-term value requires a healthy focus on value creation and on value preservation. Historically organizations have explicitly addressed the value creation imperative at a strategic level through their vision, mission statement, and corporate strategy. The value preservation imperative however while perhaps sometimes implied has rarely been explicitly addressed in the same manner at a strategic level. The difference between explicitly addressing the value creation obligation and implicitly addressing the value preservation obligation is considerable, and its impact has already had a profound effect on corporate culture and resulting corporate behavior.

This paper outlines twelve significant developments which have occurred in recent times (2016 – 2020) as a growing number of regulators, standard setters, and other governance bodies finally begin to include explicit references to the value preservation imperative. These incremental steps are now directly impacting on corporate boardrooms as the moral obligation to preserve, protect, and defend stakeholder value is increasingly viewed as an important corporate consideration in terms of both company purpose and fiduciary duty.

Keywords: Board Leadership, Boardroom Responsibility, Company Purpose, Corporate Culture, Corporate Governance, Corporate Oversight, ESG, Fiduciary Duty, Integrated Reporting, Investor Stewardship, Long-term Value, Stakeholder Value, Sustainability, Value Creation, Value Preservation

JEL Classification: G30, G34, G38, K20, L21, M14

Suggested Citation

Lyons, Sean, Value Preservation Increasingly Acknowledged as Primary Purpose and Fiduciary Duty (February 14, 2021). Available at SSRN: https://ssrn.com/abstract=3785581 or http://dx.doi.org/10.2139/ssrn.3785581

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