Accelerating Stakeholder Capitalism
What does real reform look like, and how can the pandemic entrench it?
It appears that we’ve reached a tipping point in the shift towards stakeholder capitalism. It is no longer default for companies to maximize returns to shareholders — with limited regard for customers, employees, suppliers, and communities writ large.
Last May, the Business Roundtable (an association of nearly 200 major US corporations) released a new Statement of Purpose for a Corporation, wherein signatories committed to lead their companies for the benefit of all stakeholders. In December, the World Economic Forum updated its Davos Manifesto, restating the purpose of the company: “A company is more than an economic unit generating wealth. It fulfils human and societal aspirations as part of the broader social system.” Larry Fink, CEO of BlackRock, the world’s largest investor (with $7T in assets under management), stated in his January annual letter to CEOs, “each company’s prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders.” Fink went so far as to ask BlackRock’s portfolio companies to publish disclosures on a wide range of sustainability and stakeholder issues by the end of the year.
Rejection of the shareholder primacy theory is now a bi-partisan concern in the US. Marco Rubio, chairman of…
