The proposal starts from a claim about what leaders already believe. They recognize that the shareholder versus stakeholder debate is a zero-sum game, and they know their company exchanges value with many stakeholders, but they need a positive-sum way to make the pivot without losing their jobs.
Its central evidence is the 2024 Oxford and IRG Impact Study of 750 global business leaders, which finds that overperformers believe traditional shareholder value metrics fail to capture the long-term and intangible value a business creates.
Key findings
- The intangibles named are employee loyalty, customer data, brand equity, community reputation and investor trust, and the proposal puts them at 70 to 90 percent of total business value.
- The gap on strategy is stark. 89 percent of overperforming businesses have a strategy for creating value for all stakeholders, against 10 percent of underperformers.
- The framing gap is similar. 90 percent of overperformers treat stakeholder value creation as a business opportunity, against 49 percent of underperformers, even as the politicization of ESG pushes leaders to fly under the radar.
- Measurement follows the same pattern: 62 percent of overperformers include non-financial KPIs, against 38 percent of underperformers.
- Partnership is where the difference shows up organizationally. CMOs in overperforming companies average 3.1 highly effective cross-C-suite partnerships, against 1.3 at underperformers.
Why this is not a feel-good argument
The proposal is explicit that stakeholder work is a commercial instrument. Better stakeholder understanding, engagement and value help attract customers and employees, increase lifetime value and pricing power, secure better supplier terms, and improve the reliability and predictability of cash flows.
It also argues the idea is old rather than new. The historical image offered is the factory owner who lived in the town, shopped and ate locally, and made sure local stakeholders benefited.
Looking forward, it holds that creating, measuring and celebrating stakeholder value will matter more in the age of AI and with a workforce that is majority Gen Z.
The examples it would use
The examples all show another function pulling marketing into its own problem. A healthcare system’s chief executive commissioned a holistic stakeholder map to align stakeholder needs with organizational priorities, and a restaurant chain’s CHRO asked the CMO to develop its recruitment and retention communication.
Others reach into fundraising, investor relations and franchising. A children’s media organization asked marketing colleagues to help build a high-net-worth endowment strategy, a chipmaker’s CFO worked with marketing to reinvent how the company talks to investors, and a franchise team used new personas and a digital acquisition model to recruit franchisees.
One example is about measurement rather than collaboration. In 2023 a consumer health company adopted a new success dashboard including a health inclusivity index to capture and communicate overall business performance.
The authority it rests on
The 2024 Impact Study is described as the first global cross-suite study of the pivot from shareholder primacy to stakeholder value creation, with more than 450 C-suite interviews and 750 survey responses from 61 global markets.
It is endorsed by the World Economic Forum, and its partners include the National Association of Corporate Directors, SHRM, the ACCA, the Arthur Page Society, the B Team, CKGSB, the Yale Program on Stakeholder Management, the ANA and the Marketing Society.
The partnering examples come from the IRG100 program, described as an independent not-for-profit executive leadership program in its sixth year with more than 500 alumni at CMO and CMO minus one level.
Scope and limitations
This is a proposal for an article rather than the article itself. It sets out the intended argument, data and examples, and the quotes it names from companies had still to be gathered.
Source
This page summarises Beyond Stakeholder Capitalism: Can business value be unlocked by taking a more humanized approach to growth?, by Professor Andrew Stephen, Angela Ahrendts, Marc de Swaan Arons, September 2024.