The Business Roundtable’s Stakeholder Pledge, Five Years Later

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Five years ago, the Business Roundtable issued a statement pledging to “lead their companies for the benefit of all stakeholders.

” In the past five years, stakeholderism has gained wider acceptance and helped many corporate leaders see the value of taking the interests of their stakeholders seriously when planning, developing strategy, making decisions, assessing risks, allocating resources, and so on. But that is a far cry from replacing shareholder capitalism as the central organizing principle for U.S. companies. For that to happen, much more is required.

Proponents will need to define more clearly what stakeholder capitalism is, strengthen its theoretical foundations, and develop a playbook for implementing it, including metrics for measuring performance and guidelines for making tradeoffs. They will also need to build an ecosystem of investors, executives, directors, advisors, and other professionals who understand and support it, embed its precepts in law and regulation, and educate future leaders in its tenets and practices.

 

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