The proposal starts from a claim about how leaders already think. They recognize the shareholder and stakeholder debate as a zero-sum game, know their company is part of a complex ecosystem exchanging value with multiple stakeholders, and need help satisfying better-informed and louder employees, customers, community leaders and investors who all demand more value.
What they need is a positive-sum approach that lets them pivot from shareholder primacy to stakeholder value creation without getting fired.
Key findings
- Overperformers, defined as companies with three-year revenue growth superior to direct competitors, believe traditional shareholder value metrics do not capture all the long-term and intangible value the business creates.
- Those intangibles include employee loyalty, customer data, brand equity, community reputation, and investor trust, and they represent 70 to 90 percent of total business value.
- Eighty-nine percent of overperforming businesses have a strategy for creating value for all stakeholders, against only 10 percent of underperformers.
- Politicization has pushed leaders to keep quiet, but 90 percent of overperforming businesses approach stakeholder value creation as a business opportunity, against 49 percent of underperformers.
- CMOs in overperforming companies have an average of 3.1 highly effective cross-C-suite partnerships, against 1.3 at underperformers.
Why this is not a feel-good luxury
The proposal grounds the argument in older business practice. If you built a factory, you moved to the town, shopped and ate locally, sent your children to the local school, and made sure local stakeholders benefited.
The commercial case is stated directly. Better stakeholder understanding, engagement and value help a business attract customers and employees, increase lifetime value and pricing power, attract better terms from suppliers, improve the reliability and predictability of cash flows, and maximize the probability of positive outcomes.
Looking forward, the proposal argues that creating, measuring and celebrating stakeholder value will become more critical in the age of AI and with a Gen Z majority workforce.
The examples the article would carry
Two examples concern grounding and talent. A healthcare system’s CEO commissioned the first holistic stakeholder map to align stakeholder needs with organizational priorities. A restaurant chain’s CHRO asked the CMO to help develop all 2024 employee recruitment and retention communication to win the war for talent in quick service.
Three more concern money and partners. A nonprofit’s endowment development team asked marketing colleagues to help develop and execute a new high-net-worth endowment and gifting strategy. A technology company’s CFO worked with marketing to reinvent investor interaction and improve strategy storytelling to the financial markets. A franchise team invited marketing into franchisee recruitment, where new personas and a digital acquisition model delivered immediate results.
On measurement, 62 percent of overperformers include non-financial KPIs against 38 percent of underperformers. The example given is a consumer health company that adopted a new success dashboard in 2023 with a health inclusivity index to capture and communicate overall business performance.
What the argument rests on
The 2024 Impact Study is described as the first global, cross-suite study focused on the pivot from shareholder primacy to stakeholder value creation. Led by IRG and the Said Business School at Oxford, it included over 450 C-suite interviews and 750 online survey responses from business leaders in 61 global markets.
The study is endorsed by the World Economic Forum, and its partners include the National Association of Corporate Directors, the Society for Human Resource Management, the Association of Chartered Certified Accountants, the Arthur Page Society, the B Team, CKGSB, the Yale Program on Stakeholder Management, the ANA, and the Marketing Society.
The C-suite partnering examples come from the IRG100 program, described as an independent and not-for-profit executive leadership program in its sixth year with over 500 CMO and CMO minus one level alumni worldwide.
Scope and limitations
This is an article proposal rather than the article. It sets out the central message, the evidence, and the examples the authors intend to use, and the figures it quotes come from the 2024 study of 750 global business leaders.
Source
This page summarises Beyond Stakeholder Capitalism, by Andrew Stephen, Angela Ahrendts, Marc de Swaan Arons, September 2024.