Corporate Secretary Study: Stakeholder Capitalism Gains Traction
A new study by Corporate Secretary, an IR Media publication, finds that a “large majority of companies are looking beyond the interests of just shareholders, but relatively few have so far created a formal approach to Stakeholder Capitalism amid growing interest in the concept.” The study suggests the need for a greater understanding of formal strategic and systematic implementation frameworks.Seventy-five percent of respondents to the Corporate Secretary/IR survey of corporate secretaries around the world “say their company seeks information on the needs of stakeholders – groups that can include employees, customers, suppliers and local communities – other than shareholders.” Based on 153 responses from corporate secretaries, general counsels, and their teams earlier this year, the study finds that “this is the case among 86% of respondents at mid-caps, followed by 77% of those at mega-cap companies, 75% of those at large caps and 66% of those at small caps.”
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According to Ben Maiden, Corporate Secretary Editor-at-Large, reporting on the study, the results “indicate that Stakeholder Capitalism has gained strong traction in terms of board discussions, research into stakeholder groups and directors’ engagement with non-shareholders. But it also finds that there has been less change in terms of strategy. Just 21% of respondents say their company has a defined strategy for addressing Stakeholder Capitalism. More than half (58%) say their company does not, although it should be noted that a significant number (21%) say they do not know whether their company has such a strategy.Click here for an ESM primer on Stakeholder Capitalism.
Despite the lack of formal stakeholder management strategies, “Many companies are increasingly linking executive compensation to a growing range of factors, including ESG (Environmental, Social, Governance) metrics. Globally, more than half (51%) of respondents in the new study say executive compensation is linked to corporate purpose at their company. Sixty-one percent of those at small-cap companies say executive compensation is linked to corporate purpose. This compares with 59%, 45% and 36% among those at mega-cap, mid-cap and large-cap companies, respectively.”
Maiden reports that “the most common method used to seek information on the needs of stakeholders other than shareholders is company outreach to stakeholder associations/organizations, mentioned by 75% of respondents. This is followed in frequency by market research (cited by 51% of respondents), impact assessments (50%), social media and the internet (43%) and holding open meetings (24%).
Larger companies, Maiden says, “which have more resources, are more likely to conduct impact assessments, the survey finds: 62% and 65%of respondents at large-cap and mega-cap companies, respectively, report doing so. Just a third of those at small caps and 42% of those mid-caps say the same….More than three quarters (76%) of respondents at mega-cap companies say their firm uses social media or the internet to look into the needs of non-shareholder stakeholders. This compares with around a third or less of respondents at smaller companies.”
The Enterprise Engagement Alliance at TheEEA.org 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.
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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.
- Enterprise Engagement for CEOs: The Little Blue Book for People-Centric Capitalists. A quick guide for CEOs.
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