Stakeholder thinking can be more successful once we resolve the dilemma of "value"
Theresa May couldn’t have been clearer. In her inaugural speech, the UK’s new prime minister spelled out her vision for a country that works for everyone, “not for a privileged few”. To ram home the point, she pledged to have large corporations find a seat for worker representatives on their boards. Why? Because “the people who run big businesses are supposed to be accountable to outsiders.”
Edward Freeman could be forgiven for patting himself on the back. Few academics have done more to put stakeholder theory on the map over the past three decades than this prolific professor at the University of Virginia’s Darden School of Business. His 1984 book on strategic management, subtitled A Stakeholder Approach, is now widely recognised as a founding text on the subject. Today, stakeholder thinking underpins a host of newer management fads sweeping across the CSR landscape. Most notable perhaps is the notion of "shared value", a concept refined and promulgated by the Harvard duo Mark Kramer and Michael Porter, and now cited by everyone from global multinational Nestlé to UK charity Save the Children.
So what’s stakeholder theory in a nut shell? At its most basic, it’s a management framework that encourages business leaders...