Taking Stakeholder Capitalism Beyond The Press Release
It seems that stakeholder capitalism is a PR move, but nothing else. What needs to happen to make stakeholder capitalism a reality?
Stakeholder capitalism seems like a PR move because it is — for now. It was only in August of 2019 that the Business Roundtable redefined the purpose of a corporation to promote an economy that works for all Americans. And it was only at the beginning of 2020 that the World Economic Forum Annual Meeting convened to kick off the Davos Manifesto 2020 for a better form of capitalism.
In some respects, we are still in the PR-stage of stakeholder capitalism. The road to large-scale corporate change takes time. We will face challenges.
In fact, an analysis of change management initiatives from Singaporean businesses found that for every five days spent on organizational restructuring, cultural alignment, and market entry efforts, 3.5 days go to waste. In other words, 70% of our efforts to create meaningful change fall short of their intended goals. They fail.
But it’s only failure if these businesses stop there — if they stop pursuing their stated goals. In the same vein, our journey to a more equitable world starts with a commitment to stakeholder capitalism. It would be a failure to stop here at the PR and pledge-level.
To take stakeholder capitalism beyond the press release, companies need a road map that is:
- Holistic, to include the needs of all stakeholders
- Communicable, so people buy in to the vision
- Standard, to provide structure and efficiency
- Transparent, to provide accountability
- Data-driven, to ascertain progress
The task at hand is no small undertaking, but that’s not an excuse to stay put. We need to roll up our sleeves and get to work.
While there are stakeholder capitalism scorecards emerging, implementation remains ad-hoc and voluntary. (For instance, only 4% of companies choose to publish detailed data on employee gender and race.) On top of that, we still need to address issues with data auditing and accuracy.
So where does this leave us?
Let’s start with intersectional gender pay equity, because paying people fair and equitable wages is key to:
- Reviving the middle class
- Lifting people out of poverty
- Boosting consumer spending
- Expanding the economy by $512 billion
- And ultimately, unlocking the $2 trillion economic opportunity of intersectional gender equity.