Center for
Corporate
Governance
.
 
ISSUE #69
October 2025
 
 
CORPORATE GOVERNANCE INSIGHTS.
 
 
Leading Through a Polarized World
 
 
JOHN ALMANDOZ
Juan Antonio Pérez López Chair


Leading in Fractured Societies
Polarization is no longer confined to politics—it permeates workplaces, schools, and communities. Companies, once neutral ground, are increasingly drawn into cultural battles. Leaders today face a constant dilemma: speak up and risk backlash, or stay silent and risk seeming indifferent. For directors and executives, this is not abstract—society is always watching.
Boards must remain vigilant about the values their companies endorse, recognizing that societies are fractured and societal priorities shift rapidly and with little warning. They cannot weigh in casually on public debates or allow CEOs to impose personal agendas, yet neither can companies remain passive when material issues arise. The task is not about conforming to political correctness but about exercising sound judgment anchored in corporate purpose. When purpose is authentic, meaningful and lived daily, it becomes too important to allow hijacking by fleeting controversies. Boards must discern when and how to act in ways that align with purpose—without politicizing the company or dividing employees. A way to do this, in line with Arthur Brooks’ Love Your Enemies, is to enlarge both hearts and minds: putting purpose and people at the center, while learning to embrace, not fear, differences.

Enlarging hearts: Purpose beyond self-interest
Juan Antonio Pérez López, former dean of IESE, argued that the deepest motivation for work is transcendent: serving others with their own good in mind. Unlike rewards (extrinsic) or personal satisfaction (intrinsic), transcendent motivation centers on others’ wellbeing. This shift—from “what’s in it for me?” to “how can I serve?”—creates ripple effects that unite teams, build credibility with stakeholders, and repair trust in institutions.
Examples abound. Hubert Joly’s turnaround of Best Buy relied on human connection and caring. Bob Chapman at Barry-Wehmiller reframed leadership as a responsibility to care for people. Companies like La Fageda and ISS Spain show how purpose-driven practices foster cohesion and generate results. Purpose becomes a magnet for talent, trust, and resilience.
Takeaway: Ask whether purpose genuinely engages employees and guides daily decisions. A purpose authentically lived transforms a company from the inside out and builds trust among employees and with stakeholders, thus playing a small part in restoring social peace.

Enlarging minds: From division to paradox
If enlarging hearts means embracing purpose, enlarging minds means embracing paradox. In Love Your Enemies, Brooks urges us to engage opposing views seriously, not dismiss them. That’s not weakness—it’s strategy. Organizations that welcome dissent and respect pluralism make better decisions.
Netflix learned this after its Qwikster fiasco, when leadership ignored unspoken objections. Today, it intentionally “farms for dissent,” encouraging disagreement before alignment. The result is more resilient choices and a culture where people feel safe to speak up.
Healthy competition, when rooted in respect, shared rules, and common good, elevates everyone. The danger comes when competition devolves into zero-sum thinking—“I win, you lose.” Recent corporate scandals show how chasing narrow gains destroys value and trust. Leaders must hold the bigger picture in view: success means not only advancing organizational goals but also strengthening the social fabric on which those goals depend.
Takeaway: Encourage dissent in boardrooms and C-suites. Don’t collapse complexity into binaries. Some of the best strategies emerge from holding competing truths in tension.

Recovering the big picture
Neuroscientist Iain McGilchrist warns that modern life privileges left-brain habits: narrow, analytical, reductionist. The right brain—the seat of meaning, context, and integration—is neglected. For business, that imbalance shows up in an obsession with metrics, simplification, and control, while losing sight of the bigger picture: why we do what we do. Left-brain reductionism also fuels ideological polarization. Boards and leaders must restore balance by creating space for reflection and for considering the big picture, while cultivating respect for the values represented on all sides. They must also recognize that business flourishes within a broader context that includes families, communities, and rest—elements that are not distractions from productivity but essential to it.
Takeaway: Don’t let efficiency eclipse meaning. Keep the “why” in view, not just the “what” the “how,” and the “how much.”

Closing thought
Enlarging hearts through transcendent purpose, enlarging minds through paradox, and restoring the big picture aren’t luxuries. They’re imperatives for leading organizations in fractured times. The question isn’t whether these practices are nice—it’s whether our companies, and our societies, can thrive without them.

 
 
NEWS&TRENDS.
 
 
 
The OECD Corporate Governance Factbook 2025 reveals substantial cross-regional differences in ownership concentration among listed companies. In the United States, the three largest shareholders hold between 10% and 29% of equity in over half of firms, while controlling more than 50% in only 17%. In Europe, by contrast, ownership is far more concentrated: the top three shareholders hold over half of the equity in 53% of listed companies. Read more here. 
A new PwC article examines the effectiveness of board leadership amid rising CEO turnover and shorter tenures, drawing on insights from its annual Corporate Directors Survey. Effective chairs and lead directors play a vital role in fostering alignment, managing CEO transitions, and sustaining diverse, high-performing boards. Read more here. 
A recent study by Alex Edmans and co-authors, based on a survey of over 500 equity portfolio managers from both sustainable and traditional funds, finds that environmental and social factors rank lowest among the drivers of company value. Most managers are unwilling to sacrifice financial returns for stronger E&S outcomes, citing fiduciary duty and other constraints as key limitations. Read more here. 
Glass Lewis has announced it will stop publishing its “benchmark” voting recommendations by 2027. Instead, the firm will provide clients with multiple policy perspectives. The move responds to diverging investor priorities across regions and political scrutiny of ESG guidance, aligning it with similar shifts by other major proxy advisory firms. Read more here. 
 
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