Why are nearly 90% of key business leaders embracing stakeholder capitalism?
Four decades ago, amidst the roar of Milton Friedman's doctrine, a corporation's sole duty is to maximize profits for its shareholders, a quiet revolution began. Ed Freeman dared to articulate a radically different vision in his seminal 1984 book, Strategic Management: A Stakeholder Approach.
What was once a simple, yet subversive, concept has become a seismic shift. The past few years have seen this idea move from the academic fringes to the corporate boardroom.
- In 2019, over 200 CEOs adopted a new "Statement on the Purpose of a Corporation" that acknowledged a duty to all—not just shareholders.
- In 2021, a Conference Board report revealed that nearly 90% of C-suite executives globally believe a major shift from stockholder to stakeholder capitalism is underway.
The Collision Course: Shareholder vs. Stakeholder
Shareholder theory is simple: businesses exist purely to generate maximum profit for their owners (shareholders).
Stakeholder theory explodes this narrow view. It posits that a business truly succeeds and serves the greater good only when its actions reflect what’s best for all critical stakeholders: employees, suppliers, the community, partners, and, yes, shareholders, too.
But how can a company effectively focus on maximizing shareholder profits while simultaneously serving the diverse and often competing interests of its stakeholders?
Hear from the Father of Stakeholder Capitalism
Dr. Ed Freeman, the father of stakeholder capitalism, will explain how—and why—this concept isn't just a moral imperative – it’s a high-performance business strategy for the 21st century.
R. Edward Freeman is Stephen E. Bachand University Professor of Business Administration and Olsson Professor of Business Administration at the University of Virginia Darden School of Business. A prolific author and scholar, he is best known for his award-winning and prescient book, Strategic Management: A Stakeholder Approach (1984). His recent works include The Power of And: Responsible Business Without Tradeoffs (2020), a core text for anyone navigating the complexities of modern corporate responsibility.
________________________________
This session is brought to you by the Kettering Executive Network along with the Georgia State University J. Mack Robinson College of Business and Conscious Capitalism Atlanta Chapter.
