Stakeholder Capitalism

Last week Atlas posted this note regarding the Edelman Trust Barometer illustrating Americans’ distrust of the media, corporations, non-government organizations (NGOs), and the government itself. 

What is driving this trend?  Consider this year’s theme at the recent meetings held in Davos, Switzerland (the event once described by the head of J.P. Morgan, Jamie Dimon, as the place billionaires go to tell millionaires how the middle-class feels): “Stakeholders for a Cohesive and Sustainable World.”  The super-elite seem to have adopted a new buzzword. 

Who are these stakeholders they allude to?  Every corporations’ mission involves five sets of people (owners, management, labor, consumers, and society at large).  These groups each share stakes in the business, either directly or indirectly.  But today owners and shareholders seem to take the largest slice of the pie and this is the shareholder model that has prevailed for some time. The narrative out of Davos would have us believe business and political leaders understand there should be another way.   

Shifting the emphasis from shareholders to stakeholders seems to be the theme du jour.  Society in aggregate may not be capable of holding the leaders of media, the government, NGOs, or corporations accountable.  We have seen populist sentiment show itself in many forms over the last twenty years or so.  The World Trade Organization demonstrations in Seattle, the Tea Party movement, or Occupy Wall St., but these were all eventually co-opted or squashed. Has the current Stakeholder buzzword been created simply with the goal of making us think things can get better?  We’ll see.  (J R and Christopher)