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EEA Show Recap: Stakeholder Capitalism Is Inevitable, Despite Political Headwinds

EEAIn March 2022, the Enterprise Engagement Alliance featured a YouTube show with three leaders in the Stakeholder Capitalism and related ESG (Environmental, Social, Governance) movement to assess the state of the movement. Now 18 months later, we bring back two of the three panelists to share their views of the future and their views haven’t changed: the shift to a stakeholder mindset is inevitable but will take many forms.

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How much has changed in the state of stakeholder capitalism and the related issues of ESG over the last 18 months since the beginning of the “anti-woke” campaign? To find out, we turned to R. Edward Freeman, author of the seminal 1984 book, Strategic Management--A Stakeholder Approach, and
Martin Whittaker, CEO of JUST Capital, an authority on corporate stakeholder performance. They were panelists on the March 2022 program.
A new book, R. Edward Freeman’s Selected Works on Stakeholder Theory and Business Ethics, was recently released.
To watch or listen to the live show, click here to view it on YouTube and click here to listen to it on the EEA Stakeholder Capitalism podcast.

1. The roots of stakeholder capitalism. According to R. Edward Freeman, he wrote his 1984 book based on a desire to better understand how business works. He did not think of stakeholder management as an ideology but rather as a system to better improve business by harmonizing the interests of stakeholders and by establishing a clear purpose for an organization. "Clearly business can be a force for good." 

2. What is the status of the anti-woke movement in terms of stakeholder capitalism and ESG implementation in the US and overseas? Martin Whittaker believes the distorted definition of stakeholder capitalism is simply being used by candidates and fund-raising advocacy groups to get attention and that it is not slowing down efforts by companies to look more strategically at how they create value through stakeholders. In fact, the largest number of corporations ever engaged in a pre-release review of the organization’s JUST 1000 rankings this year, demonstrating the heightened interest in the subject. (When the Good Company Index by McBassi & Co. attempted a similar type of ranking process in the 2000s, it was never able to get many companies to respond. The Good Company Index and McBassi's services were used by the Enterprise Engagement Alliance to create the Engaged Company Stock Index, a mock Exchange Traded Fund that outperformed the S&P 500 by over 38% over six years.)
Whittaker notes that the Strive Asset Management so-called anti-Stakeholder Capitalism investment fund, which recently topped $1 billion in holdings thanks in part to its former owner Vivek Ramaswamy’s presidential candidacy, holds many stocks in the JUST Capital top 1000. (Some observers explain this by observing that Strive is essentially a vehicle for undermining ESG efforts in proxy fights.)
3. Do business leaders or the public generally understand the principles of stakeholder management? The panelists agree that management is showing a greater interest in stakeholder thinking but admit that siloes and a lack of understanding of the relationships between different stakeholders remain major impediments. To Freeman, “it would be a good idea, for instance, if human resources had a better understanding not only of the welfare of employees but of the customers they affect.” One of the prime obstacles is the continued belief that “it is all about the money in business, when clearly that is not the case,” Freeman emphasizes.
4. Do businesses lack formal expertise to move from talk to action? The panelists observe that stakeholder management is an organic process based on each organization, and that there is no one system. Whittaker notes that beyond providing the general framework JUST has created based on evaluating an organization’s commitment to the people investments most valued by Americans analyzed by an ongoing survey—workers, customers, supply chain and distribution partners, the communities, and the environment—each organization will find its own way.
5. What is the state of academic emphasis on the S of ESG and stakeholder thinking? Freeman says he cannot speak to the state of stakeholder management education in schools. Based on his experience working with thousands of managers, though, Freeman is convinced that companies are beginning to lean into stakeholder thinking and that the process starts by actively listening to stakeholders. He cites an example of a meeting he attended with management developing a stakeholder strategy without having implemented a formal process to listen to the stakeholders involved.
6. What is the potential impact of the European Union Corporate Sustainability Reporting Directive? While inevitably prone to check-off-the box strategies, the new law, the panelists agree, will place more attention on stakeholder thinking and the inevitable push toward more focus on harmonizing the interests of stakeholders and greater transparency.
To Contact the Speakers/Host
Martin Whittaker, CEO
Just Capital at
R. Edward Freeman, Professor
Darden School of Business, University of Virginia
Bruce Bolger, Founder
The Enterprise Engagement Alliance at

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Through education, media, business development, advisory services, and outreach, the Enterprise Engagement Alliance supports professionals, educators, organizations, asset managers, investors, and engagement solution providers seeking a competitive advantage by profiting from a strategic and systematic approach to stakeholder engagement across the enterprise. Click here for details on all EEA and ESM media services.

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