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The Board Alchemist Dinner Debate: Power Plays & Purpose

Writer: Laura McCracken
Laura McCracken
Oct 10
9 min read

The Motion: "This House believes a board's primary duty is to its shareholders - not its stakeholders."


If you work in governance, regulation, or leadership, you will recognise immediately why I chose this motion. It sits at the fault line of two competing philosophies of capitalism - the shareholder primacy model, dominant in the United States since the age of Milton Friedman, and the stakeholder model increasingly embedded in European governance frameworks, ESG thinking, and post-financial-crisis regulation.

It is also, in my experience, a question - coupled with the unspoken power dynamics - that most boards talk around rather than articulating directly. It is too political, too binary, too uncomfortable. Which is precisely why I put it on the table.


Thirteen good people at The Wolseley, following a spirited dinner debate - chocked full of questions, anecdotes, challenge, insights and humour.


The Room: A Deliberately Diverse Gathering


On the evening of Tuesday, 30 June 2026, 13 of us gathered in the private dining room at The Wolseley, Mayfair. I will not name the specific contributions individuals made - that is what Chatham House Rule protects - but I can tell you who was in the room, because the diversity of the group is part of the story.


I've been known over two decades for my rubber ducky debates, so why should this evening be any different. As a kid, the squeak made me smile and laugh. As an adult, it brings playful lightness to serious discussions and gives folks a way to interject or object in a silly way. This time, I added a twist by giving different colour ducks to each delegate based upon their role or relationship to governance. I am pleased to report that at least five duckies were squeaked during the main course. I will say no more.


Yellow: Founders, Chairs & CEOs | Blue: Regulators, Lawyers & Policy Makers | Red: Thought Leaders, Authors & Board Advisors


Yellow Duckies: Fintech Founders & CEOs


Blue Duckies: Regulators, Lawyers & Policy Makers


Red Duckies: Thought-leaders, Authors & Board Advisors

  • Jonathan Bowman-Perks MBE - Author of The CEO's Compass, and Host of the Inspiring Leadership podcast

  • Patrick Dunne OBE - Author of the award-winning book "Boards" and Chair of the Royal Voluntary Service, Boardelta, and Education Sub Saharan Africa

  • Simon Black - Founder & Managing Partner, 1805

  • Laura McCracken - Founder, Blackheath Advisors / Founder, The Board Alchemist 


The Debate: How the Evening Unfolded


Appetiser: Independence - Does the Board Truly Have Autonomy?


We opened with what I thought would be the warm-up question. I was wrong. The room was already engaged from the first course.


The starter question - whether board independence is real or illusory — turned out to be the philosophical foundation that the whole evening rested on. The early discussion was measured, theoretical, and appropriately academic. People spoke in frameworks. They cited governance codes.


There was a broadly shared view that formal independence and actual independence are two different things. The board may be structurally independent. Whether it is culturally independent - whether its members are willing to ask the hard question, to vote against the consensus, to challenge the executive when the numbers look good - is a different matter entirely. This would prove to be a thread that ran through the entire evening.


Main Course: The Triangle of Power - When Shareholders, Chair, and CEO Want Different Things, Who Wins?


By the main course, the room had warmed up. And the conversation shifted from the theoretical to the personal. I loved this shift - full of gold nuggets. The framework is the gateway. But people's lived experience and anecdotes is the real material.


Around the main course, guests began to open up about the real tensions they had navigated. What happens when a founder-shareholder believes they know better than the board? What happens when a CEO is delivering results but the Chair has lost confidence in their leadership style? What happens when the interests of a dominant institutional shareholder diverge from the interests of the broader market - or the employees - or the customers?


The triangle of power - shareholder, Chair, CEO - was explored with a directness that I do not often hear in more formal settings. There was a palpable sense that everyone in the room had, at some point, been caught in the middle of this triangle.


  • The CEO of a UK subsidiary who had to navigate the US parent company (shareholder) demands vs the UK regulator, labour relations and consumer duty.

  • The entrepreneur who had built something remarkable and then found their own board constraining their vision.

  • The NED who had watched a CEO run rings around a Chair who was too deferential.

  • The regulator who had seen a shadow director interfering in company operations.


The rubber ducks earned their keep at this course.


Dessert: Board Purpose - US Shareholder Primacy vs European Stakeholder Model


By the time dessert arrived, we had enough shared context - and enough candour - to take on the central question directly.


The United States model, rooted in shareholder primacy and shaped by Milton Friedman's famous 1970 New York Times essay, holds that the social responsibility of business is to increase its profits. The European model, more pluralistic and reflected in frameworks from the German two-tier board system to UK codes on stakeholder engagement, holds that a board must navigate the interests of a wider constituency.


The room was not short of views. The thought leaders tended toward the stakeholder model, drawing on their work with boards that had learned the hard way what happens when shareholder returns are pursued at the expense of culture, customer trust, or regulatory standing. The founders tended to be more pragmatic - they knew that a business that is not profitable cannot serve any stakeholder for long. The lawyers and regulators brought the conversation back to what the law actually requires.

Which, as it turns out, is more nuanced than either camp tends to admit.


The Vote: A Decisive Outcome - and a Decisive Chair


We voted twice: at the opening of the evening before a word of debate had been exchanged, and at the close after three courses of argument, challenge, and several squeaked ducks.


The final vote was 10 against the motion, 2 in favour.


The overwhelming majority of this room - experienced, sharp, battle-tested leaders drawn from across the financial services ecosystem - rejected the proposition that a board's primary duty is to its shareholders alone.


As Chair, I reserve the right to exercise my casting vote in the event of a tie. We were not in a tie. But I exercised it anyway. As debate chair, I declared with great ceremony and very little constitutional authority that the motion passed.


Sometimes life is not fair. That was the point. Power play in action! :)



Conclusion: The Oxygen Mask Principle of Board Purpose


So what do we actually believe, once the debate is done and the petit fours are finished?

The sentiment in the room was clear: a good board does not and should not treat its shareholders as the only constituency that matters. The employees who build the business, the customers who sustain it, the suppliers who enable it, the regulators who licence it, the communities that host it - all of these relationships matter, and a board that ignores them will, eventually, pay the price in ways that damage the very shareholder value it was trying to protect.


I share that sentiment entirely. And yet I think the law - and the logic - is more precise than the sentiment allows.


The UK Companies Act 2006, in Section 172, is often misread. It is cited as evidence that UK law requires boards to balance stakeholder interests. But read it again carefully.

Section 172 states that a director must act in the way they consider, in good faith, would be most likely to promote the success of the company for the benefit of its members - that is, its shareholders - as a whole. The list of factors that follows - the interests of employees, relationships with suppliers and customers, community and environmental impact, the company's reputation for high standards, fairness between members - these are not ends in themselves. They are the considerations a director must have regard to in the pursuit of the primary duty. They are the constraints and the means. The destination remains the same: the success of the company for the benefit of its shareholders.


Companies Act 2006 - Section 172: Duty to Promote the Success of the Company

A director must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard to:

(a) the likely consequences of any decision in the long term,

(b) the interests of the company's employees,

(c) the need to foster the company's business relationships with suppliers, customers and others,

(d) the impact of the company's operations on the community and the environment,

(e) the desirability of the company maintaining a reputation for high standards of business conduct, and

(f) the need to act fairly as between members of the company.


I think this careful reading reflects something important about the logic of governance that the dinner debate circled but did not quite land on directly.


Think of it this way. When you board an aircraft, the flight attendant always gives the same instruction: in the event of an emergency, put your own oxygen mask on before helping your children. This is not because the child's life matters less. It is because an incapacitated adult cannot help anyone. The hierarchy of the instruction reflects the logic of capability, not the hierarchy of value.


Boards face the same logic. A company that is unprofitable, insolvent, or a failing concern cannot protect any stakeholder - not its employees, not its customers, not its communities. The board's primary duty to ensure the company is a successful, solvent, ongoing concern is not a choice to value shareholders over others. It is the precondition for being able to serve anyone at all.


Furthermore, the interests of most non-shareholder stakeholders are already protected by the architecture surrounding the board. Employees have employment law. Customers have consumer protection regulation and contract. Suppliers have commercial agreements. Regulators have statutory powers.


The board is not the last line of defence for these constituencies. It is one constraint among many. The board's job is to operate successfully within all of those constraints - including the legal, regulatory, and reputational ones that Section 172(1)(a) through (f) captures - in service of the members.


Where I believe there is a genuine and important role for Independent Non-Executive Directors in particular is in holding the board honest to the full scope of Section 172. The INEDs are the conscience of the board. They are the ones with the standing and the mandate to ask whether the long-term consequences of a decision have been considered, whether employees have been treated fairly, whether the company's relationships with its broader stakeholders are being managed in a way that sustains - rather than undermines - the success the board is ultimately there to deliver. But even in that role, the INEDs are not operating as advocates for stakeholders against shareholders. They are ensuring that the board serves its shareholders wisely - with the long view, with the full picture, and with the integrity that Section 172 demands.


The board that tries to serve all stakeholders equally, without that anchor of commercial purpose, is a board that, in my experience, tends to serve none of them well. It loses focus, loses accountability, and loses the clarity of mission that allows a leadership team to make hard decisions under pressure.


So here is where I land, after dinner, after debate, and after five squeaked rubber ducks: the motion was right in law and in logic, even if it was wrong in sentiment. A board's primary duty is to its shareholders. But the careful reading of that duty - the one that Section 172 actually enshrines - requires the board to have regard to a wide constellation of interests in the pursuit of that purpose. The role of the Chair is to align shareholder interests with all other stakeholders. Shareholders first. But stakeholders always in view.



The series runs by invitation only, limited to fifteen guests per evening. If you would like to be considered for a future dinner, board workshop or afternoon tea debate, please reach out directly at lmccracken@blackheathadvisors.com.


All debates are conducted under Chatham House Rule. The themes and flow of discussion shared in this article reflect the general shape of the evening's conversation. No individual contributions have been attributed.

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