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Stakeholder capitalism: Difference between revisions
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And so it has come to pass: “''stakeholder'' capitalism” has displaced [[shareholder capitalism]]. [[Wall Street|Gordon Gekko]] is out. Arif Naqvi is in. | And so it has come to pass: “''stakeholder'' capitalism” has displaced [[shareholder capitalism]]. [[Wall Street|Gordon Gekko]] is out. Arif Naqvi is in. | ||
We, the planet, ask corporations to orient themselves toward ''all'' their “stakeholders” — customers, [[creditor]]s, suppliers, [[employee]]s, the community, the [[Environmental, social and corporate governance|environment]], the marginalised | We, the planet, ask corporations to orient themselves toward ''all'' their “stakeholders” — customers, [[creditor]]s, suppliers, [[employee]]s, the community, the [[Environmental, social and corporate governance|environment]], the marginalised multitudes that suffer invisibly under the awful [[Externality|externalities]] of industry ''and'' — last, but not least! — shareholders. | ||
''Corporations must not profit at the expense of the wider world''. | ''Corporations must not profit at the expense of the wider world''. | ||
This view seems so modern, so | This view seems so modern, so [[empathetic]] and so ''right'' — so ''fit for [[Twitter]]'' — that it is hard to see how anyone can ever have thought otherwise. | ||
But still, this is a striking reversal: it passed with barely a shot fired. | But still, this is a striking reversal: it passed with barely a shot fired in defence. | ||
Even that trade union for unreconciled boomer gammons, the Business Roundtable | Even that trade union for unreconciled boomer gammons, the Business Roundtable got in on the act: recently, it “redefined the purpose of a corporation” away from ''the outright pursuit of profit'' towards ''promoting an economy that serves all Americans''. | ||
{{Quote|“It affirms the essential role corporations can play in improving our society,” said Alex Gorsky,<ref>No relation to ''that'' [[Good luck, Mr. Gorsky|Mr. Gorsky]], as far as we know.</ref> Chairman and CEO of Johnson & Johnson and Chair of the Roundtable’s Corporate Governance Committee,<ref>Not trying to be funny or anything, but is being Chairman ''and'' CEO really the best example for a chair of a corporate governance committee to set?</ref> “when [[CEO|CEOs]] are truly committed to meeting the needs of all [[stakeholder]]s.”}} | {{Quote|“It affirms the essential role corporations can play in improving our society,” said Alex Gorsky,<ref>No relation to ''that'' [[Good luck, Mr. Gorsky|Mr. Gorsky]], as far as we know.</ref> Chairman and CEO of Johnson & Johnson and Chair of the Roundtable’s Corporate Governance Committee,<ref>Not trying to be funny or anything, but is being Chairman ''and'' CEO really the best example for a chair of a corporate governance committee to set?</ref> “when [[CEO|CEOs]] are truly committed to meeting the needs of all [[stakeholder]]s.”}} | ||
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But stakeholder capitalism ''codifies'' the [[agency problem]]. It diffuses the executive’s accountability for anything the corporation does, putting the [[professional-managerial class]] beyond the reproach of the one constituent stakeholder group with the necessary means, justification and consensus to call it out: their [[Shareholder|shareholders]]. | But stakeholder capitalism ''codifies'' the [[agency problem]]. It diffuses the executive’s accountability for anything the corporation does, putting the [[professional-managerial class]] beyond the reproach of the one constituent stakeholder group with the necessary means, justification and consensus to call it out: their [[Shareholder|shareholders]]. | ||
===Stakeholder capitalism as disguised shareholder capitalism=== | ===Stakeholder capitalism as disguised ''shareholder'' capitalism=== | ||
Maybe that’s what the Business Roundtable meant; maybe not. Maybe they’ve changed their minds. Here's current chair, Jamie Dimon, quoted in the FT: | Maybe that’s what the Business Roundtable meant; maybe not. Maybe they’ve changed their minds. Here's current chair, Jamie Dimon, quoted in the FT: | ||
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