The Conference Board: 90% of Execs in Survey Say Stakeholder Capitalism Is Coming...

This working group of senior executives at the Conference Board finds that the Stakeholder Capitalism movement is already affecting their businesses.

 

The shift to Stakeholder capitalism is durable because it is being driven by investors, employees, customers, business partners, and policymakers, according to a report published by the Conference Board based on a series of roundtable discussions with CEOs and their heads of finance, legal, HR, government relations, technology, marketing, and communications.

 

The Conference Board is one of the world’s leading think tanks for top organizational leaders and is comprised of top executives from some of the world’s leading companies. Among other findings:

The shift to a stakeholder focus requires a heightened and sustained level of collaboration among the C-suite. As a result, the Conference Board produced reports for CEOs, CFOs, chief legal officers, chief human resources officers, government relations executives, chief marketing officers and the marketing function, and Senior Communications executives.

 

“The shift toward Stakeholder Capitalism has not only amplified the role and voice of employees, but also dramatically increased the focus on talent at all levels of an organization,” says Rebecca Ray, Executive Vice President of Human Capital, at the Conference Board.

 

Dana Peterson, the Conference Board Chief Economist, writes: “Leaders must consider how they reinvest in their operations, in their workforce, and in new products and services that may be more environmentally sustainable or socially responsible.”

 

Says Paul Washington, Executive Director of ESG Center. “Trust is the key to success in the shift toward Stakeholder Capitalism.”

 

The report states that executives who recognize and embrace the shift now are better positioning themselves and their companies for success in the future. The shift, while not universal, is occurring across industries and at all types of companies: public, mutual, and private. This shift is affecting discussions, decisions, and actions at the board and C-suite level.

 

In addition, the report says “there is an increased focus on environmental and social issues, diversity, equity, inclusion, employee well-being, workforce management, and community impact. The broader focus on stakeholders is requiring corporate leaders to seek a broader array of information about the potential impact of decisions on stakeholders, so that they can make informed decisions about the trade-offs involved.”

 

C-suite executives say “it is also significantly affecting the way they spend their time—both in the topics they are addressing and the internal and external stakeholder groups with whom they are engaging. With a clear strategy, CEOs can drive growth for their company and create broader opportunities for stakeholders. CEOs should ensure their company has a strategy for being a stakeholder-focused company, which is tailored to suit the company’s particular circumstances, and which has clear objectives for which the company can be held accountable.”

 

The working group finds that “CEOs who embrace radical humanity—that is, who bring their authentic selves to bear in their roles as CEOs—are better positioned to connect with stakeholders. The shift to a stakeholder focus requires a heightened and sustained level of collaboration among the C-suite.

 

“It’s important to remember that the evolution of capitalism underway is not a zero-sum game. Shareholder value and stakeholder value are not mutually exclusive,” says Lori Esposito Murray, President of the Committee for Economic Development, the public policy center of The Conference Board. “Firms that focus on the long-term welfare of their employees, customers, and communities are better positioned to deliver long-term value for their investors. Moreover, a focus on stakeholders is vital to sustaining capitalism itself.”

 

“It used to be that social and environmental issues were compartmentalized—somebody else’s problem. Now they’re everybody’s problem,” says Chuck Mitchell, Executive Director of Content Quality at The Conference Board. “Moreover, there is a shift from viewing serving all as something ‘extra, that was nice to do,’ to something that is a business imperative for distinguishing companies in the marketplace and attracting quality talent to grow their businesses.”