Corporate boards, faced with increasing global unpredictability and volatility, recognise that the call for a stronger philosophical model for stewardship is growing louder than ever. No longer will the traditional governance frameworks that they relied on, which were focussed primarily on compliance and risk mitigation, be expected to successfully manage the complex and multifaceted challenges and opportunities of the day. Instead, there is a need for stewardship – one that emphasises long-term value creation, ethical leadership, and sustainable impact.
As effective corporate stewards, board members are expected to preserve, protect, and increase value over time. They need a model that would enable them to make decisions that best balance the diverse interests of multiple stakeholders, including shareholders, employees, customers, and society at large. One such model is WTW’s global stewardship model, which incorporates the following five Ps: Purpose, People, Planet, Protection, Performance. The principles underpinning each of these elements can serve as foundational pillars, guiding organisations towards responsible decision-making and long-term value creation.
Purpose
Purpose is the very reason an organisation exists. A clearly defined and activated purpose provides a moral compass; it is the North Star that guides each and every member of the organisation towards responsible and ethical operations. By aligning purpose with all critical functions throughout the organisation, boards have the opportunity to act in the best interests of all stakeholders.
Some of the most successful Asian companies have long held a purpose-driven business ethos. We can draw inspiration from Jamshedji Tata, the founder of India’s Tata Group: “In a free enterprise, the community is not just another stakeholder in business, but is in fact the very purpose of its existence.”[1] In crafting a long-term strategic agenda, boards must keep purpose front and centre, ensuring that all organisational efforts are consistent with the company’s core values and objectives.
People
People are the lifeblood of any organisation. A highly engaged, healthy, and motivated workforce not only performs better but also drives significant value creation. Engaging deeply with the workforce involves understanding and enhancing the employee experience, evaluating leadership based on human capital management, and ensuring safety and well-being at both physical and psychological levels.
Not only must boards work to ensure the above, but they are also required to foster diverse, inclusive, and equitable environments. At the same time, given the rapid changes in the future of work, upskilling and reskilling employees are essential to build a resilient talent pool.
Studies by WTW reveal that companies that perform well on key human capital metrics consistently outperform their peers on financial and stock measures. For example, take the JPX/S&P CAPEX & Human Capital Index in Japan, whose constituents are selected for their progressive investments and people practices. The index consistently outperforms the broad market, underscoring the importance of progressive people priorities.
Planet
Boards have a duty to assess, measure, and manage the risks and opportunities arising from climate change, transition to net zero, and other environmental challenges. Not only do they need to ensure compliance with regulatory requirements, but they must also safeguard against greenwashing. Additionally, they must ensure that environmental metrics are aligned with incentives across the organisation, so that action-based rewards can be balanced with sustainability outcomes.
Policymakers in Asia have recognised the importance of board members needing to be at least climate-literate; for instance, stock exchanges in Malaysia and Singapore have made it mandatory for all directors of listed companies to complete sustainability training. This elevates boardroom discussions so that directors can ask the right questions and guide management’s actions.
Protection
In an increasingly volatile world, an increased significance has been attached to protection from risk. Boards need to be cognisant that reducing uncertainty and safeguarding against potential losses, whether these arise from direct or systemic risks, are critical to the success of their organisation. They must develop a comprehensive understanding of their organisation’s risk portfolio and employ the most efficient means to mitigate them. Strong boards that act as good stewards recognise that managing a portfolio of risks is more effective than treating each one separately.
With many severe risks being under-quantified and underinsured, the role of advanced analytics becomes pivotal in providing foresight and clarity. Take the example of a leading company in the Philippines that suffered significant losses in revenue due to typhoons causing plant shutdowns. It took out a special parametric insurance where the claim is contingent on certain parameters being triggered – in its case, wind speeds above a certain level, and proximity of the storms within a certain radius of its facilities.
Performance
While appearing as the last of the five elements in the list, performance can in fact be considered the most important of all. Performance is the critical keystone within the five Ps, as without strong operational and financial performance, it would be impossible to sustain the organisation in the long term.
What is to be noted though is that performance cannot simply mean delivering strong commercial returns; it must include many other factors such as the promotion of sustainability, societal impact, and the alignment of organisational values. It is about developing and nurturing talent, fostering innovation and transformation, and building a workplace that enables every member of the organisation to realise their potential.
Boards of such companies appreciate that purpose and profits are not at odds with each other, but are inextricably linked. The charter of Temasek, a global investment company headquartered in Singapore, states this well: “Operating on commercial principles, we deliver sustainable returns over the long term. As stewards of our assets, we engage our portfolio companies to enhance shareholder value and advocate good governance practices. Together, we contribute to the uplifting of the communities in which we operate. We invest in human potential, build with courage, and catalyse solutions, with sustainability at the core of what we do. In all these, we seek to Do Well, Do Right, and Do Good.”[2]
As corporate stewards, board members are constantly sailing on the seas against a background where societal assumptions and environmental directives are in flux. They must therefore take on extensive commitments in the face of the intertwined character of financial, social, and environmental dictates. This will entail not only reconceptualised performance measurement standards to encompass sustainability, but also making sure governance habits from human capital to climate change deliberations are in agreement.
Boards need to also be aware that ethical governance should be a moral duty to a planet that requires oversight, not just a crucial directive. To conclude, boards ought to foster an attitude concentrating on the future, thus they should expect problems and grab chances to pioneer new ideas. And when organisations decide on aggressive multiyear objectives, they can make their activities successful even when the situation changes. This would enable their duties to be in line with stewardship requirements, thereby arriving at a balanced mix of profit and purpose.
This article was first published in the July 2025 issue of Asian Management Insights magazine by the Centre for Management Practice, Singapore Management University (SMU). It is reproduced here with written permission from SMU. No part of this article, whether in whole or in part, may be reproduced without prior permission from SMU and WTW.
