We like to believe that transparency, accountability, and long-term value creation will empower corporations to resolve climate breakdown and social inequality. Yet this belief is illusory. Governance codes recast responsibility as personal optimisation and moral discipline, whereas genuine responsibility is political: a matter of choices, values, conflicts, and visions of the future. By reducing complex societal dilemmas to managerial challenges, governance codes obscure the need for collective judgement and institutional renewal. They safeguard the status quo, elegantly cloaked as progress. Real governance does not begin with rules, but with a more fundamental question: What kind of society do we wish to serve?

Investors and companies are increasingly assigned a central role in addressing social and ecological challenges. Climate-focused investment strategies like BlackRock’s, activist interventions such as Engine No. 1’s push for ExxonMobil’s decarbonisation, and corporate initiatives like Patagonia’s regenerative agriculture efforts all exemplify the belief that private finance and long-term value creation can rein in short-termism and externalities. Governance codes are designed to embody this principle. Yet they fall short: rather than promoting effective sustainability, they often impede it.

When governance becomes an ideology

Debates about governance codes – whether rules-based or principle-based, broad or narrow – overlook a fundamental issue: their provisions are too abstract to offer meaningful guidance. They create the impression that transparency, accountability, and risk management are universal tools that boardrooms can apply to any problem relating to people, planet, or profit. This heroic image of corporate decision-making is ideologically loaded. Michel Foucault’s Naissance de la biopolitique shows how neoliberalism reshapes responsibility into an individualised duty of self-optimisation. Corporate governance adopts this logic: autonomy becomes self-management, and responsibility becomes a moralised yet economic instrument of self-discipline.

Governance codes reproduce this vision at the organisational level. They assign firms moral responsibility for global crises and expect solutions through improved self-discipline – better choices, better disclosure, better optimisation. Fundamental tensions between economy and ecology, or continuity and community, are reframed as technical dilemmas. This obscures that responsibility has always been political: a question of who decides, for whom, with what authority, and according to which ideals.

The central concept of long-term value creation illustrates the problem. Its meaning is so vague that it offers little guidance for existential trade-offs between business continuity, the interests of future generations, and planetary liveability. It appears forward-looking but is actually static. It presumes universal win-wins and hides the reality of incompatible values. It overlooks that crises such as climate change and inequality stem not only from failures of individual rationality, but also from dominant narratives that shape the meaning of responsibility and structure the field of action for firms, states, and citizens.

The limits of technocratic governance

Governance codes also misrepresent the radically uncertain context in which companies operate. Climate change, inequality, and geopolitical instability cannot be distilled into neat ‘governance challenges’. Universal principles are inadequate because no transcendent rationality exists that can incorporate legitimate political differences and conflicting interests. Technocratic codes, with their aura of neutrality, lack a vocabulary for complexity. They offer false comfort: the illusion that the right governance structure or individual decision can solve fundamentally collective and political problems.

The content of governance codes is therefore less important than the ideology they express. They nourish the illusion that complex social issues can be resolved through efficient, technocratic processes without reforming underlying narratives or relationships of power. They legitimise the status quo while presenting themselves as progress. This makes them not instruments of transformation, but agents of depoliticisation.

Towards collective responsibility and institutional renewal

A more promising alternative begins with recognising that plurality, conflict, and uncertainty are not deviations from an ideal equilibrium, but fundamental to human coexistence. The business world is embedded in this politically charged reality. Rather than universal codes and abstract norms, we need context-sensitive institutional practices that permit genuine choices between incompatible interests and different pathways of development.

Examples include participatory budgeting, indigenous co-governance arrangements, citizens’ assemblies on climate policy, local land-use or energy transition councils, and multi-stakeholder governance models that openly negotiate conflicting interests rather than applying universalised norms. Responsibility must be reimagined not as an individual moral burden but as a collective task grounded in shared deliberation about privilege, power, and human development.

There is no viable pathway for sustainable development if we continue believing that ‘better governance’ is the key to progress. Sustainable pathways open only when we articulate a clear societal vision of commerce, production, technology, labour, care, and collective organisation – shaped through democratic decision-making, attentive to future generations, and bounded by ecological limits. It is this collective vision, translated into coherent industrial policy rather than individualised moral responsibility or technocratic efficiency, that forms the true basis of effective governance.