An interesting – and likely controversial – development out of Connecticut’s state legislature, pushing a public utility company to publicly name their “top priority” stakeholder. In response to the company’s announcement of the appointment of Joe Nolan as new CEO, Bob Duff, the Connecticut Legislature Senate Majority Leader, sent a short letter to Nolan asking:
As you begin your tenure, I would like to ask one question: out of the three groups you serve, who is your top priority?
1. Customers
2. Shareholders
3. Wall Street Analysts
Some may see this as theater since the legislature could enact laws if they wanted to encourage utilities or other types of companies were required to prioritize a particular set of stakeholders. Possible grandstanding aside, there is something useful here. A few years ago, Famed Harvard and Oxford professor Robert Eccles, along with fellow Harvard prof Tim Youmans came up with the idea that companies should issue a Statement of Significant Audience and Materiality. They have since renamed this the Statement of Purpose. Among the benefits of issuing such a statement is explicitly identifying the company’s point of reference for defining what is “material” in an ESG context.
While I probably wouldn’t start a business scalping tickets to ESG theatrical events, I wouldn’t be surprised to see more corporate developments – and possibly legislator activity.
