A Sustainable Platform Economy & the Future of Corporate Governance

A significant development in the global economy over the last two decades has been the emergence of businesses that organize and define themselves as “platforms.” By platform, we refer to any organization that uses digital or other emerging technologies to create value by facilitating or coordinating connections between two or more groups of users. Think Amazon (connecting buyers and sellers), Facebook (connecting friends and family), or Uber (connecting service providers and service users). Over the last decade, platforms have grown to become some of the largest companies in the world and all companies and other organizations are now obliged to consider integrating platform ideas and experience into their operations. However, platforms are increasingly controversial. Most obviously, they raise concerns about privacy (think Facebook and Google) and market power (think Amazon and Google). And as platforms have expanded in size, they have struggled to maintain their initial promise and brands that were initially disruptive have lost much of their initial appeal (think Facebook or Uber). In this paper, we identify the distinctive features of a “platform business model” (through a comparison with the modern company) and introduce the concept of a "sustainable platform," to describe a platform-style business that is both innovative and socially responsible. The main argument of the paper is to suggest that there is a “disconnect” between the current business needs and values of sustainable platforms and contemporary policies and regulation, particularly corporate governance. Overcoming this disconnect – developing a new “platform governance” – is crucial for the long-term prospects of sustainable platforms, and the economy more generally.