Skip to content

11 July, 2025

  • Saved Articles
  • My Account
  • Subscribe
  • Log In
  • Log Out

Board Agenda

  • Governance
  • Strategy
  • Risk
  • Ethics
  • News
  • Insight
    • Categories

      • View all
      • Governance
      • Strategy
      • Risk
      • Ethics
      • Board Expertise
      • finance
      • Technology
    • EU sustainability

      Omnibus package must not undermine EU sustainability

      Now is the time for Europe to speed up green transition, rather than slow it...

    • high pay

      Pay gap transparency needs to be better

      It’s not unknown for a CEO to earn 500 times as much the median employee,...

    • executive pay

      Executive pay trends in 2025

      Opposition to remuneration reports has grown sharply, according to Georgeson’s analysis of voting outcomes in...

  • Comment
      • View all
    • EU sustainability

      Omnibus package must not undermine EU sustainability

      Now is the time for Europe to speed up green transition, rather than slow it...

    • high pay Pay gap transparency needs to be better

      It’s not unknown for a CEO to earn 500 times as much the median employee,...

    • future-proof governance levers How to future-proof your business

      For boards to bolster resilience and create value in a polycrisis, a combination of hard...

  • Interviews
      • View All Interviews
      • Podcasts
      • Webinars
    • UK Corporate Governance Code Board meetings ‘are not up to scratch’

      Nearly three-quarters of board members believe the board’s performance in meetings needs improvement, an expert...

    • financial sanctions Tariffs chaos drives boardroom focus on resilience

      Business leaders will prioritise the resilience of their organisations in the face of economic upheaval...

    • supply chain oversight Act now on supply chain oversight, boards warned

      Board directors need to critically engage with the business’s supply chain activity, a panel of...

  • Board Careers
  • Resource Centre
      • White Paper Downloads
      • Book Reviews
      • Board Advisory & Corporate Services
    • C-suite barometer: outlook 2025 – UK insights

      Forvis Mazars draws UK insights from its global study and looks at UK executives’ strategic...

    • Talent Management 2025 Mind Gym

      Talent Management in 2025

      From rethinking leadership to wrestling with AI, MindGym's report reveals the trends shaping talent strategies...

    • Korn Ferry CHRO 2025 (Copy)

      On The Highwire: Being a CHRO in 2025

      Korn Ferry surveyed 750 senior HR leaders (including 450 CHROs) to understand their key priorities...

  • Events
  • Search by topic
    • Governance
    • Strategy
    • Risk
    • Ethics
    • Regulation
    • ESG
    • Investor Relations
    • Careers
    • Board Expertise
    • finance
    • Technology

Stakeholderism: study finds evidence in short supply

by Gavin Hinks on August 7, 2020

Governance has been dominated by the debate over shareholder primacy vs stakeholders. But US companies show little sign of changing tack.

Jamie Dimon

Business Roundtable chair and JP Morgan CEO Jamie Dimon at the Fortune Global Forum. Image by Fortune Live Media, licensed under CC BY-NC-ND 2.0

Have companies become more focused on stakeholders and toned down their attention to the interests of shareholders? Many argue there has been a shift but Harvard academics say they have evidence that is it is more like business as usual.

After looking the evidence from 48 US companies signed up to a ground breaking pledge to work for “all stakeholders” rather than shareholders alone, Lucian Bebchuk and Roberto Tallarita, experts in governance at Harvard Law School, conclude than in reality nothing much has changed.

Writing in the Wall Street Journal, the pair say: “Notwithstanding statements to the contrary, corporate leaders are generally still focused on shareholder value. They can be expected to protect other stakeholders only to the extent that doing so would not hurt share value.

“That conclusion will be greatly disappointing to some and welcome to others. But all should be clear-eyed about what corporate leaders are focused on and what they intend to deliver.”

‘No major change’

Bebchuk and Tallarita look at companies who signed up to an August, 2019 statement from the Business Roundtable —a club for US corporate leaders, then chaired by JPMorgan Chase chief executive Jamie Dimon—which saw 180 big name companies declare: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”

The statement was reported around the world and is frequently cited as evidence that corporate attitudes have changed and a fundamental shift is underway at the heart of capitalism.

The Harvard profs conclude the evidence is lacking. They asked Business Roundtable companies if the decision to sign up to the statement had been cleared by their boards. Of the 48 that replied just one confirmed its board was consulted first. The other 47 “indicated” their boards were not involved.

Bebchuk and Tallarita wonder why chief executives would sign up to such a significant statement without the green light from their boardrs. The most “plausible” explanation, they say, is that the CEOs did not believe the statement entailed any major change to the way stakeholders would be treated.

The profs note it could be because CEOs are convinced their stakeholders are already well considered. “But it still implies that they believed signing the statement wasn’t a major step for their businesses,” they write.

Then they dug a little deeper looking at the board-approved governance guidelines published by a number of the companies. They found they “mostly reflect a clear ‘shareholder primacy’ approach.”

They cite the example of JPMorgan Chase itself, where guidelines clearly state the board works “on behalf of the firm’s shareholders.”

Acceleration

Where does that leave stakeholderism? It’s no secret that many have argued fundamental change would be needed for the movement to really gain traction. In the UK, at least, the Institute of Directors has set up an entirely new governance centre to specifically explore this issue.

It may also be the case that boardroom approval and governance guidelines are not sufficient to prove that stakeholderism is absent in the US or elsewhere. Policy decision making at different levels—including chief executives acting alone—may reflect a shift to new forms of corporate behaviour, regardless of board-sanctioned decisions.

When the Sustainability Board Report , a campaign group, looked as corporate statements made by the world’s largest 100 companies as a result of Covid-19, it concluded there was evidence to suggest stakeholderism had “accelerated” during the pandemic. But it was inspecting disclosures about policies relating to employees, customers, suppliers and communities rather than formal boardroom approval processes or redrafted governance guidelines.

That might suggest CEOs make decisions that reflect stakeholderism without constructing a formal board-approved shift in approach. For that matter, it might also indicate such a movement could be short-lived and swing back once the threat of Covid-19 has receded.

Campaigners hope not. Close observers might also ask how stakeholderism might be properly observed or even measured.

The discussion has a long way to go. Bebchuk and Tallarita raise important questions with some compelling evidence. But it’s not entirely clear we’ve reached a final verdict on stakeholderism.

  • Facebook
  • Twitter
  • Google+
  • LinkedIn
  • Mail

Related Posts

  • US corporates 'should do more' to help environment and low-paid workers
    September 1, 2021
    ESG strategy icons over green cityscape

    Respondents to a recent US poll say a more “evolved” form of capitalism is needed to better reflect the interests of stakeholders.

  • Academic warns that 'good' corporations are bad for democracy
    September 13, 2021
    US flag flying on Wall Street

    So called 'good' corporations have “not actually changed, at least not in terms of their legal mandates”, claims Joel Bakan.

  • Investors influence ESG performance, study reveals
    July 26, 2022
    Investors influence ESG

    Researchers find that, among the many drivers for improving ESG, intervention by corporate investors is key.

  • Hybrid AGMs maximise shareholder participation
    May 30, 2023
    hybrid AGM

    Avoid virtual-only annual general meetings: although pragmatic in an emergency, they water down shareholders’ rights.

Search


Follow Us

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts – Sign up here

 

Most Popular

Featured Resources

wef global risks 2025

The Global Risks Report 2025

The 20th edition of the Global Risks Report reveals an increasingly fractured global...
Supply chain management cover

Strategic Oversight in Supply Chain Management: A Guide for Corporate Boards 2025

Supply chains have become complex, interdependent and opaque and—according to research...
OB-Cyber-Security

Cyber Security: What Boards Need to Know

Maintaining firewalls, protecting servers and filtering malicious emails rarely make...

The IA’S Principles Of Remuneration 2024 2025

This guidance from the Investment Association is aimed at assisting remuneration...
Diligent 2024 leadership tech cover

Leadership, decision-making & the role of technology: Business survey 2024

This research report by Board Agenda and Diligent sheds light on how board directors...

Director Reference Guide: Navigating Conflict in the Boardroom

The 'Director Reference Guide' on navigating conflict in the boardroom provides practical...
Nasdaq 2024 governance report cover

Nasdaq 2024 Global Governance Pulse

This Nasdaq survey gathered data from more than 870 board members, executives, and...

Becoming a non-executive director (4th edition)

Board composition is the subject of much debate, while the role of the non-executive...
art & science brainloop new cover

The Art & Science of Creating an Effective Board

Boards are coming under more scrutiny and pressure than ever before from regulators,...
SAA First time NED guide

First Time Guide for Non-Executive Directors

The role of the non-executive director has never been more vital: to advise, support,...

Register Free

Stay in the know! Register to access the latest governance news; plus receive updates about our events and podcasts. Register


  • Editors & Contributors
  • Editorial Advisory Board
  • Board Advisory & Corporate Services
  • Media Marketing Solutions
  • Contact Us
  • About Us
  • Board Director Network
  • Terms & Conditions
  • Privacy Policy
  • Cookies
|

Copyright © 2025 Questor Media Group Ltd.

  • Terms & Conditions
  • Privacy Policy
  • Sitemap