What is Stakeholder Capitalism?

Stakeholder capitalism proposes an approach to economic organisation where companies prioritise creating long-term value for all stakeholders—employees, customers, suppliers, local communities, and the environment—rather than focusing solely on short-term profits for shareholders. Emerging from stakeholder theory, this model challenges the traditional shareholder-centric view by recognising that businesses operate within interconnected social, economic, and environmental systems.

The idea dates back to the 1950s and 1960s. In post-war economies, businesses often collaborated with local institutions and considered employee welfare, community well-being, and supplier relationships integral to success. The vision of stakeholder capitalism emphasises that sustainable business growth depends on the health of its broader ecosystem, including society and the planet.

Today, stakeholder capitalism extends beyond local contexts to address global challenges, such as climate change and social inequities, promoting a vision where people, planet, and prosperity are interconnected.

Readings and Resources

• Blattberg, C. (2000). From Pluralist to Patriotic Politics: Putting Practice First. Oxford: Oxford University Press.
• Blattberg, C. and Scudder, D., (2024). A critique of stakeholder theory. In: T. Clarke, W. Klif and C. Ingley, eds. Elgar Encyclopedia of Corporate Governance. Northampton, MA: Edward Elgar Publishing.
• Freeman, R. Edward, Jeffrey S. Harrison, Andrew C. Wicks, Bidhan L. Parmar, and Simone de Colle. (2010). Stakeholder Theory: The State of the Art. Cambridge, UK: Cambridge University Press.
• Marcoux, A. (2003). A Fiduciary Argument against Stakeholder Theory. Business Ethics Quarterly 13(1), 1–24. 
• Miles, S. (2012). Stakeholder: Essentially Contested or Just Confused? Journal of Business Ethics 108(3), 285–98. —– (2017). Stakeholder Theory Classification: A Theoretical and Empirical Evaluation of Definitions. Journal of Business Ethics 142(3), 437–59. 
• Mitchell, R.K. (2012). Review of R.A. Philipps (ed.) Stakeholder Theory: Impacts and Prospects. Organizational Studies 33 (10),1407–11. 
• Mitchell, R.K., Agle, B.R. and Wood, D.J., (1997). Toward a theory of stakeholder identification and salience: Defining the principle of who and what really counts. The Academy of Management Review, 22(4), pp.853–886.
• Schwab, K. and Vanham, P. (2021) Stakeholder Capitalism A Global Economy That Works for Progress, People and Planet. Newark: John Wiley & Sons, Incorporated.