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Corporate Secretary Study: Stakeholder Capitalism Gains Traction

Corporate SecretaryA 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.”
Ben Maiden 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.”

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