By Angeli Patel | January 12, 2025
As global leaders gather in Davos, the 2025 World Economic Forum Annual Meeting’s themes reflect our unprecedented moment: ‘Rebuilding Trust,’ ‘Reimagining Growth,’ ‘Safeguarding the Planet‘ and ‘Industries in the Intelligence Age. These intersecting challenges raise a critical question: How can business become the catalyst for positive change in an era of disruption? The Berkeley Center for Law and Business is committed to exploring this challenge, recognizing that without a thriving business sector, scaling the solutions our world needs is impossible.
The erosion of trust in business institutions, accelerated by widening income inequality and large-scale disruption, demands new frameworks for corporate strategy. In this complex landscape, centers like ours serve a crucial role in distinguishing between substantive developments and sensational narratives, helping organizations navigate unprecedented challenges.
From Skepticism to Necessity
Early discussions about corporate purpose and sustainability met widespread skepticism. However, in a world facing interconnected challenges – from climate change to technological disruption – restoring faith in corporations’ ability to innovate and scale solutions becomes imperative. Neither government nor business alone can address these challenges. Corporate engagement in political participation, resource stewardship, and employee well-being isn’t optional – it’s fundamental to societal progress.
The Role of Corporate Law in Modern Society
Corporate law serves three essential functions: ensuring sound corporate governance, fostering trust in private transactions, and creating accountability for all stakeholders. Yet today’s rate of change demands more from our courts, laws, and thought leaders than ever before.
The global climate crisis and wildfires in Los Angeles and the Middle East, a key theme on the World Economic Forum Annual Meeting agenda, demonstrate how corporate choices over time, even when legal, carry profound environmental societal implications. At home in Silicon Valley, take the example of OpenAI’s governance crisis in late 2023. The sudden board restructuring, subsequent leadership changes, and Elon Musk’s pending lawsuit highlight how traditional corporate governance frameworks are being challenged to navigate new technological frontiers.
These examples illustrate that businesses today must make choices that not only drive innovation but also anticipate long-term societal impacts. This also underscores the need for evolved corporate strategy frameworks—ones that emphasize engagement, endurance, and evolution in navigating an increasingly complex world.
The Choice-Based Framework
Resilient businesses are engines of societal progress, developing solutions for our greatest challenges. But when short-term profits drive decisions, companies lose their capacity to weather shocks and adapt to change – failing, too, the ecosystem in which they exist. The “trust problem” stems from this interconnection.
Rebuilding trust, therefore, requires focusing on how companies make decisions, not just what they achieve. Through careful observation and analysis, we’ve developed a framework that uses legal risk analysis to identify opportunities where others see only constraints.
Our framework emphasizes three key principles:
- Engagement: Understanding and acting on stakeholder relationships
- Endurance: Building resilient corporate structures
- Evolution: Adapting strategy to address societal gaps
Consider Airbnb’s response to concerns about racial bias on its platform: when faced with public outrage on Twitter, the company responded decisively, partnering with civil society, social scientists, and engineers. Through a comprehensive civil rights audit, Airbnb transformed its technology—from unintentionally perpetuating bias to actively mitigating it—showing how thoughtful, values-driven decision-making can restore trust and drive meaningful progress. Now, in the age of AI, Airbnb is equipped with the governance, teams, and policies necessary to ask the right questions and responsibly reshape the travel and hospitality industry through AI innovation.
Another compelling example is Schneider Electric, which has endured for over a century by continuously adapting to the needs of its stakeholders. Long before “climate transition” became part of the global lexicon, Schneider made electrification its core strategy, driven by a deep engagement with customer needs and the willingness to pivot ahead of industry trends. This forward-thinking mindset not only earned the company recognition as TIME’s World’s Most Sustainable Companies of 2024 but also positioned it as a leader in the race for data center cooling solutions.
Airbnb’s and Schneider’s success illustrates that lasting trust is built on a foundation of meaningful stakeholder engagement, a systems understanding of industry trends, and the boldness to evolve ahead of the curve.
The Path Forward
At Davos, we bring this vision forward, exploring how growth-oriented companies can embrace a choice-based framework through the lens of risk-informed corporate strategy. BCLB is the intellectual hub at the intersection of law and business—analyzing shifting corporate governance practices, M&A trends, and emerging frameworks for climate and AI governance. Our mission goes beyond understanding what exists; it’s about illuminating what’s possible.
Our agenda is clear: to help business leaders make choices that rebuild trust, foster innovation, and create lasting value. Join us in this crucial work of shaping the future through business law.