Getting Serious About Stakeholder Capitalism ^ BG2102

Publication Date: May 24, 2021

Business can’t thrive in an environment of unhealthy employees, customers, and communities, an at-risk planet, and a fractured society. To transition to a more sustainable future in which corporations serve all stakeholders–not just investors–executives must rethink their mission. In “How to Lead in the Stakeholder Era,” former Best Buy chairman and CEO Hubert Joly provides a blueprint for pursuing a noble purpose, putting people at its center, and creating a workplace where every employee can blossom. In “Power Sharing Can Change Corporations for the Better,” Julie Battilana and Tiziana Casciaro write that good intentions and positive corporate statements can’t create real societal change until power is shared more broadly. This goal requires two fundamental shifts. The ousting of Danone’s CEO has been cast as a clash between activist investors and stakeholder capitalism. But in “The Myth of the CEO Hero,” Mary Johnstone-Louis and Charmian Love explain how Danone’s circumstances show that in a corporate ecosystem that meets the needs of people and the planet, there can be no singular heroes. Startups tend to operate with the mentality that growth and profit come first, higher calling second. This strategy is misguided, says Ranjay Gulati in “Why Today’s Startups Pursue Both Ideas and Ideals.” Instead, entrepreneurs gain three strategic and operational advantages when they imbue their ventures with a grand ideal as well as a great idea. Inequality in the U.S. is a worsening, and companies must address it. Expanding employees’ company ownership stakes, thus giving them a path to building wealth, is a good place to start, according to Thomas Dudley and Ethan Rouen in “The Big Benefits of Employee Ownership.” In “The Climate-Equity Connection,” Auden Schendler of Aspen Skiing Company argues that companies will face big challenges when they treat climate as a core stakeholder, particularly as political groups step up attempts to build a broad climate-equity coalition.

To solve big, global problems, companies must rethink capitalism and how they collaborate, argues Mariana Mazzucato, professor in the economics of innovation and public value at University College London. In the video “Walk the Talk of Stakeholder Capitalism,” she lays out four strategies for doing so.

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