Anadarko says it is ‘not realistic” to expect companies not to prioritise shareholders

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Anadarko says it is ‘not realistic” to expect companies not to prioritise shareholders

3:15 CAT | 26 Jun 2019

in file CoM

Anadarko vice president John Grant acknowledged on Monday the importance of the public sector to business sustainability, but stressed that this is a competence of governments, while the private sector must prioritise shareholders.

“It is unrealistic to expect that private companies will not give priority to the interests of their shareholders. This may seem like a crude and harsh statement, but it is the nature of the economic system that we have and companies will continue to defend it,” John Grant said during a speech at a conference on fragile states in Lisbon.

Image result for john grant anadarko — File photo: Linkedin

He added, however, that companies must create value “in the long run and realistically”, and that they must be required to comply with legal obligations in the country in which they operate.

Anadarko, a multinational operating in the United States, the Gulf of Mexico and Africa, has recently announced that it will invest more than US$20 billion in a natural gas project in the Rovuma basin Cabo Delgado, Mozambique, an amount equivalent to twice the countrys gross domestic product.

John Grant felt that companies “should realize what it takes to successfully run a successful long-term business in a developing country”, and that this means taking local interests into account.

“If shareholders and investors want a long-term, sustainable and successful business that manages risks effectively and at the same time protects shareholders, they have to realize that their presence in any country has to be aligned with the interests of people living in that country,” whether at the level of local businesses, local communities or citizens in general.

He stressed that companies should establish relationships of trust with governments and local communities, as this “is important to create value for shareholders in the long term”.

For the Anadarko vice president, an ethical and sustainable management is compatible with the interests of the shareholders and desirable.

“Ethically reprehensible behaviour can generate such strong political and popular opposition that it can threaten operations and change things in a meaningful way,” he warned, pointing to factors of change such as citizen power, social networks and the distance between politicians and their voters.

He recalled, however, that many decisions are within the ambit of governments.

“The key to all this is good governance in the public sector, and it is not the companies that do this. We run businesses, we do not run governments,” said Grant, who is also the head for International Government Relations at Anadarko.

Source: Lusa