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Has the Business Roundtable Kept Its Stakeholder Capitalism Promises - The Answer is: We Don't Know

With the second anniversary of the Business Roundtable’s historic commitment to what is now called Stakeholder Capitalism, the business media will do the usual fact check to see if the pledge is being kept. There is little way to know the answers because public companies do not yet disclose the information necessary to judge. 
By Bruce Bolger
BR logoHave the Business Roundtable companies kept their pledge to become Stakeholder Capitalist companies dedicated to addressing the needs of all stakeholders? The debate will likely be reignited this week as the second anniversary of the Business Roundtable updated charter is upon us. 
Click here for an overview of Stakeholder Capitalism recently published on Wikipedia. 
The truthful answer is no one knows where most of these companies actually stand. For the most part, the human capital disclosures made by public companies in their SEC 10-K filings are too vague to draw any firm conclusions, and the information published to the public in Corporate Sustainability Reports are not much more factual. Many of the Business Roundtable companies have pledged to commit to the World Economic Forum’s new Stakeholder Capitalism metrics in public disclosures, but there is little evidence yet of action. 
We probably won’t know what companies really look like until the SEC requires human capital disclosures that specify the type of information to be published along with clear metrics. That will take another two to three years, by which time the current Securities & Exchange Commission chairman Gary Gensler intends to require a “rules-based” approach to disclosures, meaning reporting on workforce turnover; pay and benefits; health and safety; professional development, and diversity, including that of the board. See ESM: SEC Chairman Gary Gensler Seeks More Robust Human Capital Disclosures
In the meantime, skeptics such as Lucian Bebchuk and Roberto Tallarita of Harvard Law School argue that the Business Roundtable pledge is essentially a farce because almost none of the CEOs even bothered to notify their boards of the change nor have sought any modification in their corporate charters, such as by becoming Public Benefits Corporations (a status now available in about 30 US states.) Others, such as the Heritage Foundation, contend that Stakeholder Capitalism robs from shareholders to support the pet interests of CEOs. 
Until there is an agreement on a clear definition of Stakeholder Capitalism, a term which has made it to Wikipedia but not yet to Merriam-Webster, Oxford, or, the debate is of little value. 
Under the Enterprise Engagement Alliance’s definition of Stakeholder Capitalism, the opponents do not have a strong case. It’s about “creating returns for shareholders by creating value for customers, employees, distribution and supply chain partners, communities, and the environment.” There’s no need to change corporate charters to do that, nor are shareholders robbed of any wealth or deprived of their democratic rights.

Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
The Enterprise Engagement Alliance at is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
Training and Thought Leadership 
  • Founded in 2008, the Enterprise Engagement Alliance provides outreach, learning and certification in Enterprise Engagement, an implementation process for the “S” or Social of Stakeholder Capitalism and Human Capital Management and measurement of engagement across the organization.
  • The Enterprise Engagement Alliance provides a training and certification program for business leaders, practitioners, and solution providers, as well as executive briefings and human capital gap analyses for senior leaders.
  • The EEA produces an education program for CFOs for the CFO.University training program on Human Capital Management.
  • Join the EEA to become a leader in the implementation of the “S” of ESG and Stakeholder Capitalism. 
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The EEA Human Capital Management and ROI of Engagement YouTube channel features a growing library of 30- to 60-minute panel discussions with leading experts in all areas of engagement and total rewards.
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Enterprise Engagement Advisory Services 
The Engagement Agency helps:
  • Organizations of all types develop strategic Stakeholder Capitalism and Enterprise Engagement processes and human capital management and reporting strategies; conduct human capital gap analyses; design and implement strategic human capital management and reporting plans that address DEI (Diversity, Equity, and Inclusion), and assist with managed outsourcing of engagement products and services.
  • Human resources, sales and marketing solution providers profit from the emerging discipline of human capital management and ROI of engagement through training and marketing services.
  • Investors make sense of human capital reporting by public companies.
  • Buyers and sellers of companies in the engagement space or business owners or buyers who seek to account for human capital in their mergers and acquistions
For more information: Contact Bruce Bolger at or call 914-591-7600, ext. 230.
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