How Stakeholder Capitalism Can Rebuild the Currency of Trust
A bank chairman and economist writes that a decline in trust is posing a significant challenge for business that can be addressed through the principles of stakeholder capitalism.Click here to subscribe to the ESM weekly e-newsletter.
Addressing the Essential Element of Trust
The Mars Example
Trust is the foundation of economic transactions and business relationships. Without trust, the market economy cannot function effectively, writes Jordi Gual, Professor of Economics at IESE Business School; a research fellow at the Centre for Economic Policy Research (CEPR) in London, and Chairman of the Board of Directors of VidaCaixa, an insurance company in Spain. His paper, “Stakeholder Capitalism Can Help Build a Currency of Trust”, recently appeared in the governance section of the International Institute for Management Development in Lausanne, CH.
Gual contends that trust has been declining in recent decades, posing a significant challenge for capitalism. Trust, he writes, is essential for the smooth functioning of the market economy, helping to ensure that business relationships are profitable and operations run smoothly. There has been a noticeable decline in trust among citizens towards the business world, including public entities, he observes.
Addressing the Essential Element of Trust
Stakeholder capitalists, he believes, seek markets in which they can differentiate themselves and build trust, based on the greater attention they pay to their social and environmental impacts, satisfying the interests of multiple stakeholders and benefiting from the trusted relationships they cultivate with those stakeholder groups over time.
He writes that “Mars is proof that a large corporation can have a positive social and environmental impact while remaining profitable. However, it requires an ownership structure and a personal commitment from its leaders, management team, and the boards of directors.
Gual outlines three philosophies describing how firms operate today:
Classical liberal approach: Focuses solely on maximizing financial performance with minimal regulatory interference.
Enlightened capitalism: Incorporates the interests of other stakeholders beyond shareholders, recognizing that social and environmental considerations can contribute to long-term success.
Stakeholder capitalism: Advocates for a holistic approach that balances financial, social, and environmental goals to restore trust and ensure sustainable business practices.
The Mars Example 
Gual believes the practice of stakeholder capitalism can build a more trustworthy and sustainable corporate environment and uses Mars Inc. as an example. “Famous for M&M’s, Snickers, and Mars bars, and privately held by the Mars family for over 100 years, the company has long operated according to five principles: quality, responsibility, mutuality, efficiency, and freedom. The company states: ‘It is our independent family ownership that gives us the freedom to think in generations, not quarters, so we can invest in the long-term future of our business, our people, and the planet.’”
The company’s culture, he asserts, “results in low employee turnover, and its decentralized structure encourages personal autonomy and ethical behavior. In December 2024, it announced plans only to use responsibly sourced cocoa in its supply chain by 2030. Additionally, Mars actively supports regenerative agriculture and has pledged to achieve net zero, all while running a $50 billion business with over 100,000 employees in 80 countries.”
To Gual, “Mars is proof that a large corporation can have a positive social and environmental impact while remaining profitable. However, it requires an ownership structure and personal commitment from its leaders, management team, and board of directors.”
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Contact: Bruce Bolger at TheICEE.org; 914-591-7600, ext. 230.
