The Value Preservation Imperative *

Abstract

Stakeholder groups appear to intuitively understand that logically the delivery of sustainable value over the long-term requires a healthy focus on value creation and value preservation. Historically, organizations have explicitly addressed the value creation imperative at a strategic level through their company purpose, vision and corporate strategy. The value preservation imperative, however, while perhaps sometimes implied, has rarely been explicitly addressed in the same manner at a strategic level. The difference between explicitly addressing the value creation obligation and implicitly addressing the value preservation obligation is considerable, and its impact has already had a profound effect on corporate culture and resulting corporate behaviour.

This article outlines the significant developments that have occurred in recent times (2016–2022), as a growing number of regulators, standard setters and other governance bodies finally begin to include explicit references to the value preservation imperative. These incremental steps are now directly impacting on corporate boardrooms, as the moral obligation to preserve, protect and defend stakeholder value is increasingly viewed as an important corporate consideration in terms of both company purpose and fiduciary duty.