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Stakeholder capitalism: Difference between revisions
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How do you arbitrate between creditors and the local community? Between the environment and customers? Between penguins and polar bears? On whose say? | How do you arbitrate between creditors and the local community? Between the environment and customers? Between penguins and polar bears? On whose say? | ||
And who ''are'' these stakeholders for whose wellbeing the corporation is suddenly guardian? Shareholders’ names and interests, after all are set out on a register. There is no corresponding ranked list of constituents, interest groups, factions. The priorities, narratives and moral imperatives of “the world at large” are indeterminate.<ref>Those railing at this idea are invited to | And who ''are'' these stakeholders for whose wellbeing the corporation is suddenly guardian? Shareholders’ names and interests, after all are set out on a register. There is no corresponding ranked list of constituents, interest groups, factions. The priorities, narratives and moral imperatives of “the world at large” are indeterminate.<ref>Those railing at this idea and not persuaded by a cursory glance at the day’s newspapers are invited to consider the works of Kant, Mill, Hobbes, Hume, Smith, Nietzsche, Nozick, Wollstonecraft, Warnock, Butler, Rawls, hooks and Marx and return with a concise summary. </ref> | ||
Even if you know ''who'' they are, how do you ''what'' — beyond having as much of your soda as you can make, as cheap as you can sell it — your stakeholders’ interests are?<ref>There is a hand-wavy argument that executives should have in mind the “best interests of the community” and not anyone’s selfish needs and wants. But who knows what that is? How does a moral agenda determined by the corporate executive class — mainly white, ageing, cis-gendered, post colonial men, in case it at slipped anyone’s attention — improve on no moral agenda at all? | Even if you know ''who'' they are, how do you ''what'' — beyond having as much of your soda as you can make, as cheap as you can sell it — your stakeholders’ interests are?<ref>There is a hand-wavy argument that executives should have in mind the “best interests of the community” and not anyone’s selfish needs and wants. But who knows what that is? How does a moral agenda determined by the corporate executive class — mainly white, ageing, cis-gendered, post colonial men, in case it at slipped anyone’s attention — improve on no moral agenda at all? | ||
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But even so, beyond their shareholding, shareholders are not monolithic investing homunculi: they are ordinary people with disposable income. If they want to beautify the inner city, save polar bears or fight water scarcity, they can do that ''directly''. There are charities whose very mandate is to agitate for just that. That is a far better way to allocate capital. It puts control in the investors’ hands, where it should be. Investors do not need to channel their charitable activity through the medium of their equity portfolio. And why would they? | But even so, beyond their shareholding, shareholders are not monolithic investing homunculi: they are ordinary people with disposable income. If they want to beautify the inner city, save polar bears or fight water scarcity, they can do that ''directly''. There are charities whose very mandate is to agitate for just that. That is a far better way to allocate capital. It puts control in the investors’ hands, where it should be. Investors do not need to channel their charitable activity through the medium of their equity portfolio. And why would they? | ||
We cannot fathom the moral agenda | We cannot fathom the moral agenda, if there even ''is'' one behind an investor’s decision to invest in a bank stock. And are Bank executives ''really'' best advised to draw attention to the moral qualities of their organisations? Who ''knows'' if bank shareholders care about water scarcity or polar bears? But if the alternatives are “assume shareholders mainly want a capital return, and do that” or “let the [[Chief executive officer|chief executive]] decide what her shareholders’ moral priorities should be”, then it is not a difficult choice. | ||
Banks should prioritise prudent lending standards and timely risk management. Corporates should deliver goods and services to their customers for more than it costs to produce them. Companies should stick to their knitting. Governments, NGOs, supra-nationals and dedicated charities with resources, expertise and focus can deal with water scarcity. If bank shareholders care about water scarcity, they can give their disposable resources to water scarcity specialists. That is surely a better way of doing it than buying bank stocks. | |||
===About those executives=== | ===About those executives=== | ||
Professor Bakan’s proposition that a disembodied pile of papers is intrinsically psychopathic is a bit far-fetched. The idea that the collected shareholders of the world’s companies are all psychopaths is even more far fetched. Well, if it isn’t we are well and truly doomed, because that is all of us. | |||
But the idea that, of the tiny, feral class who elbow their way into the executive suites of the world’s listed companies, an outsized portion has a sociopathic element to their personalities? We do not find that especially far-fetched at all. Now — if we allow for a cynical moment that it might be true — ask yourself this: is it wise to delegate responsibility for working out our moral priorities to a small group of entitled people with a plausibly heightened propensity towards psychopathic behaviour? For isn’t that what stakeholder capitalism essentially advocates? | |||
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*{{author|Simon Sinek}}’s {{br|The Infinite Game}} | *{{author|Simon Sinek}}’s {{br|The Infinite Game}} | ||
{{Ref}} | {{Ref}} | ||