Need for a New Corporate Model in a New Era: Implications for the Financial Sector

In the new era of Globalization, we are faced with several cases of 'ethical failures'. New questions are being raised with respect to the foundational premise of the 'Corporate model' that originated to maximize the return to shareholders. Though it has undergone transformation towards the stakeholder concept, it is weak in terms of its'ethical foundations. Executive greed as well as Corporate greed have overtaken the objective of 'wealth creation for society'. Wealth creation for the executives has taken primacy leading to many wrong decisions as indicated by the recent recession experience in America. Many American Corporations have fallen from grace. This indicates that there is a need to revisit the foundational concepts of the modem Corporations. Paper suggests the need for a new foundation in terms of a Tripod model, based on recognition of inter-linkages, interdependence and integration of Market, Society and Self. In this framework, Market, Society and Self are not only considered as Cocreators of wealth but 'Co-creators of Wealth with Grace'. For this 3 Rs (Resources, Responsibilities, Relationships) model is suggested. This model also leads us towards a new Performance Scorecard on the basis of 'Holistic Performance of The Corporation'. Paper also examines implications of 3 Rs model for Financial Sector for developing a new reporting system based on 3 Rs.