28 Jan 2021

Enterprise Models and the EU agenda

Donald Kalff

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The EU is leading the world with its roadmap for companies – the Sustainable Industry as part of the Green Deal, the EU Climate Target plan for 2030 and the New EU Industrial Strategy. At the same time, in pursuit of these crucial objectives, the Union is heavily dependent on the contribution of the private sector.

The question is whether companies are equipped to follow this path and take on the associated responsibilities. Hurdles that so far received little attention now present themselves in the realm of governance and management, organisation structure and culture as the major determinants of corporate behaviour.

This paper argues that the dominant enterprise models, the shareholder model and the stakeholder model, both serve as barriers to the shift from growth-oriented to sustainable, resilience-oriented capitalism. It stresses the need for alternative models and sketches the contours of a new competitive enterprise model that is firmly rooted in values continental Europeans share. It will be called the EU Model. Finally, it proposes an EU agenda for a level playing field, because competition between models should be encouraged.

The day has come for politicians and policymakers to no longer limit themselves to rubberstamping corporate governance codes. They must actively engage in discussions about how the private sector organises itself. Bravery will be rewarded.