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Stakeholder Capitalism: A Primer


Stakeholder Capitalism is a growing worldwide reform movement that enhances returns for investors by creating value for employees, customers, supply chain and distribution partners, communities and the environment. It is based on both research and common sense that organizations can do well by shareholders by doing good for people and the environment, and should not be confused with "Woke capitalism" or Corporate Social Responsibility (CSR), which often are the equivalent of "greenwashing." 

Rather than an ideology, it is a management system, time-tested in total quality management practices around the world, applied to creating new value from the 80% of the typical organization's balance sheet allocated to people in the form of "good will." 

The movement is based on business practices going back to the 1950s in the world of total quality management and in the academic world going back to the 1980s as explained in this recent academic review of the management theory behind Stakeholder Capitalism. It was not created in 2019, as some believe, when the Business Roundtable updated its charter of the organization to address the needs of all stakeholders, which was in effect little more than a press release. Stakeholder Capitalism principles predate the term ESG by decades. 

The concept and principles of Stakeholder Capitalism have existed for decades but there remains confusion about the definition that is either a natural consequence of any new concept or is in some cases an opportunity to poke holes in it. This primer clarifies the definition for Stakeholder Capitalism based on decades of pre-2019 usage. It provides a brief history and a list of the relatively small number of people and organizations whose work has contributed to a better understanding of the virtuous circle of prosperity and a healthier environment created by strategically and systematically engaging all stakeholders in the missions and objectives of the enterprise.

Despite the recent pronouncements from the Business Roundtable and others, the concepts underlying Stakeholder Capitalism did not come down from on high but rather from the practical efforts of academics and business people trying to improve business. The Enterprise Engagement Alliance channel has a regularly updated library of shows consisting of panel discussions with experts in all areas of business and academia on the practical implementation of Stakeholder Capitalism to achieve organizational results. This article was first published in March 2020 and was most recently updated in April 2023. The concept of Stakeholder Capitalism is completely non-partisan as it does not require government involvement.

The European Union has now upped the ante on Stakeholder Capitalism through the passage of its new Corporate Sustainabilty Reporting Directive, which will require up to 50,000 companies worldwide, and at least 3,000 of the largest US companies, to disclose detailed information on employee turnover, safety, diversity, pay equity, and more, as well as the employee management practices of its supply chain and its practices related to customers and communities. 

Click here for an EEA Youtube show conversation on Stakeholder Capitalism between Bruce Bolger, EEA founder and R. Edward Freeman, Professor of Business Administration at the Darden School of the University of Virginia, both early advocates of the field, or this show with Leo E. Strine, Jr., former Delaware Chief Justice, another pioneer and a strict advocate for keeping business out of politics and vice versa.

Click here for a library of Stakeholder Capitalism and human capital management resources. See the footer for information about the activities of Enterprise Engagement Alliance at or contact Bruce Bolger at 914-591-7600, ext. 230 or

By Bruce Bolger 

EE for CEOs cover 2022Governors in Texas, Florida, and Louisiana have drawn attention to Stakeholder Capitalism through their proposed measures to curtail state pension funds from investing in investment managers that promote or support ESG (Environmental, Social, Governance) practices, increasingly associated with Stakeholder Capitalism. Nineteen states have now formed a coalition to oppose ESG investing. Sen. Pat Toomey, R., PA., made national news by requesting detailed information of standards from more than a dozen ESG ratings firms. Writing recently in opposition to Stakeholder Capitalism in multiple publications and cable media platforms, a former health care entrepreneur, asset manager, and now Republican presidential candidate Vivek Ramaswamy, says, without reference to any formal definition, that “Stakeholder capitalism refers—or at least used to refer—to the idea that companies should serve not just their shareholders, but also other societal interests.” Ramaswamy is now running for the GOP nomination for US president on an anti-Stakeholder Capitalism plank using a definition with no basis in established usage.  

On the other side of the Atlantic, the European Union is moving rapidly toward establishing ESG and Stakeholder Capitalism as the primary business framework. In late 2022, it passed the Corporate Sustainability Reporting Directivewhich will apply to all organizations that do business in or with EU companies with more than 250 employees, ar at least 40 million euros in annual sales or a balance sheet of 20 million euros in assets. It requires companies to file detailed human capital practics and analytics affecting their employees and those of their distribution and supply chain partners, as well as equally detailed information on customer and community engagement practices and metrics, and the environment. According to Carmen Lu, Counsel, ESG, for New York-based Wachtell, Lipton, Rosen, and Katz, "I think we are experiencing a kind of key inflection point in the shift to Stakeholder Capitalism. The movement has been going on for many years but with the rise of ESG and now the CSRD law, corporations will be forced to make the shift." She believes that US companies and those around the world that wish to do business in the EU or with large EU companies will have little to no recourse in local courts if they do not want to comply. 

For those following the topic, there's a lot of talk about Stakeholder Capitalism, but ask the average business person or American citizen if he or she has heard of it, and the usual response is "no," "sort of" or "maybe." Despite recent references to Stakeholder Capitalism in the New York Times, Fortune, Forbes, the Economist, Financial Times, and on CNBC, Fox News, in some academic journals, and in bills introduced in Congress in the past by senators Elizabeth Warren, Dem., MA; Mark Warner, Dem., VA, and Rep. Cindy Axne, Dem., ID, advocating for human capital disclosures, the debate around Stakeholder Capitalism rests largely below the public radar. Google searches for the term skyrocketed in 2019 after the Business Roundtable changed its definition of the charter of an organization to address the needs of all stakeholders, but as of March 2023, there are only about 720 followers of the subject on Linkedin, up from about 30 in 2020, and not a lot of activity on Twitter, most of it from the anti-ESG crowd. 

Nonetheless, the topic promises to gain greater traction given that it has become under extreme attack from the right wing as "Woke" capitalism, in particular by Sen. Ted Cruz, R., TX., former Vice President Mike Pence, and Fox News personalities Laura Ingraham, Tucker Carlson and others. Some progressives see Stakeholder Capitalism as an attempt to double-down on capitalism. New York Times journalist Peter Goodman took aim at Stakeholder Capitalism in a feature article in the Sunday New York Times business section, "CEOs Were Our Heros, At Least According to Them," using the term "Davos Men" to describe people like Salesforce CEO Marc Benioff who professes to be a Stakeholder Capitalist while funding the company's largesse by taking advantage of tax loopholes. See ESM: Davos Man Author on the Dangers of Stakeholder CapitalismSee also ESM: Stakeholder Management Professor Questions Benefits of Spotlight.

On the other hand, its key proponents include the influential JUST Capital advocacy group founded by hedge fund investor Paul Tudor Jones II; the World Economic Forum with its 1973 Davos Manifestoits newly published Stakeholder Capitalism Metricsand the recently published book by its founder, Klaus Schwab, appropriately named Stakeholder Capitalism; the Business Roundtable, representing the world’s largest companies; the Embankment Project founded by the Rothschild family, EY, and others, which has become the Coalition for Inclusive Capitalismthe International Organization for Standardization; Conscious Capitalism, one of the earliest proponents; B Lab, another early adocate founded in 2007; the Shared Values movement officially founded in 2011, and the Economics of Mutuality Foundation, a group recently formed by the Mars family. The financial publication Barron's, with its 100 Most Sustainable Companies annual report, has also become a major advocate, as has its sister publication with the Wall Street Journal Management Top 250, produced in conjunction with the Drucker Institute. In early 2022, the concept continued to gain momentum. In his annual letter to investors, BlackRock CEO Larry Fink announced the creation of the Center for Stakeholder Capitalism at BlackRock to "create a forum for research, dialog, and debate" to help "further explore the relationships between companies and their stakeholder and between companies and their stakehoders and beween stakeholder engagement and shareholder value." (There has been no subsequent action that we know of.) The Kenan Institute of Private Enterprise on the campus of the University of North Carolina dedicated the year 2022 to the topic of Stakeholder Capitalism and held an annual conference on the subject in January 2023: "The Promise and Perils of Stakeholder Capitalism.

So what is Stakeholder Capitalism? The problem is that there is no official definition, without which there can be no way to engage in serious debate. Certainly, it cannot be defined by the Business Roundtable press release of 2019. In fact, one of the earliest proponents of a stakeholder approach to management was the total quality management innovator Edward R. Deming, who as early as the 1950s wrote that "the aim proposed here for any organization is for everybody to gain--stockholders, employees, suppliers, customers, community, the environment--over the long term."

After Deming, one of the earlier references to this stakeholder approach in modern literature comes from the 1973 Davos Manifesto published by the World Economic Forum, which reads: "The purpose of professional management is to serve clients, shareholders, workers and employees, as well as societies, and to harmonize the different interests of the stakeholders." The only "official" definition we can find is on the web site Investopedia, which appears to be a cause of confusion. Without reference, it uses the following definition: “Stakeholder Capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders. Among the key stakeholders are customers, suppliers, employees, shareholders and local communities. Under this system, a company's purpose is to create long-term value and not to maximize profits and enhance shareholder value at the cost of other stakeholder groups.” Contributing to the confusion, the economist Robert Reich references the term with that definition in a 2014 blog post. The business authors Doug Sundheim and Kate Starr reference Stakeholder Capitalism in a Harvard Business Review article assuming that everyone already understands the term without providing any clear definition as a frame of reference.

This definition has led to interpresentations that Stakeholder Capitalism "has at its core the idea that shareholder interests need to be deprioritized in favor of other goals," as observed by Tom Gosling, a professor at the London Business School, in a recent article, which does not provide a reference for this definition. Nor does the Kenan Institute for Private Enterprise in North Carolina provide a source for its definition in a recent report: "The controversial broadening of a business’ mandate beyond maximizing profits to account for its impact on customers, suppliers, employees and executives (that is) exceedingly complex. Increasing numbers of businesses grapple with the adoption of ESG frameworks and Stakeholder Capitalism’s tenets – along with the inevitable trade-offs between competing stakeholder groups such adoption brings…”

These interpretations, provided without any source or reference, are not based on the nearly 50 years of usage in the business and academic world, which emphasizes Stakeholder Engagement as a source of value creation, with ethical behavior or attention to the environment seen as a benefit to shareholders, not a tax on them. Nothing more is asked of business than to act ethically and to see addressing societal and environmental challenges as a business opportunity, which also means not offloading costs on to society and taxpayers, such as underpaying employees so that they need food stamps or Medicaid, polluting the environment or leaving behind abandoned factories or buildings for communities to clean up, creating dangerous products or misleading services, or engaging in discrimination, with its multiple costs.

The recent definitions appear to have been spawned by the Business Roundtable 2019 prouncement that defines it as taking into account the interests of all stakeholders with almost no further explanatory definition. In the academic and business world from which its principles came, which predate the Business Roundtable pronouncement by decades, Stakeholder Capitalism focuses on ethical behavior and aligning and addressing the interests of all stakeholders as a means of achieving organizational objectives, not as an obligation, an important distinction. A recent meta-analysis of Stakeholder Engagement academic papers conducted by three professors in Europe defines the underlying theory as the "aims, activites and impacts of stakeholder relations in a moral, strategic, and/or pragmatic manner." It's not about robbing from shareholders to pay other stakeholders, but about growing the pie. Nor is it about diverting profits to support pet political causes as is common in shareholder capitalism. Similarly, an article in the May-June 2023 edition of Harvard Business Review entited "How to Create a Stakeholder Strategy," by Bain & Company executives Darrel Rigby, Zach First, and Dunigan O'Keeffe, makes no mention of making contributions to social causes but rather focuses on stakeholder capitalism as a more sustainable means of creating wealth. 

For a practical view of Stakeholder Capitalism, Leo E. Strine ranks among the United States' most experienced experts in corporate governance. He currently serves as Of Counsel in the Corporate Department at one of the world’s leading corporate law firms Wachtell, Lipton, Rosen & Katz, and before that was the Chief Justice of the Delaware Supreme Court from early 2014 through late 2019. Before becoming the Chief Justice, he served on the Delaware Court of Chancery as Chancellor since June 22, 2011, and as a Vice Chancellor since Nov. 9, 1998. At a meeting of the Interfaith Center for Corporate Responsibility in fall 2022, he defined Stakeholder Capitalism as "having corporations focus on how they affect the best interests of their stockholders, their workers, their communities and operations, their consumers, and the environment. It’s about making money the right way; seeking profit without externalizing their costs; supporting the basic institutions of society upon which they rely; leaving largely to their human investors, workers, and consumers to decide for themselves and showing respect for freedom of beliefs by not imposing the views of corporate management on any stakeholder group.”  

To opponents on the right, the recently fabricated definition sounds like Democratic Socialism or corporatism in disguise; to those on the left, corporate speak and green-washing. So far, the leading opponents to the concept of Stakeholder Capitalism have based their objections on the Investopedia definition, which indeed could lead to the confusion opponents allege by reinforcing the conflicting priorities already common at most organizations. Every day is a balancing act for CEOs facing demands from all stakeholders, not all of whom have the same interests. In fact, as can be seen by the actual 50 years of usage in academia and business practice in Total Quality Management, Stakeholder Capitalism better aligns stakeholder management and creates wealth the same way ISO 9001 quality standards have improved quality--through the application of a strategic and systematic approach to managing our relationships with all the people critical to success, increasingly known in accounting and human resources parlance as our human capital, or human wealth as some may prefer.
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The Definition of Stakeholder Capitalism Consistent With Sound Business Principles and Decades of Practice

Consistent with actual usage going back to the 1950s and long before the new definition created in opposition to the Business Roundtable updated charter of the corporation, the Enterprise Engagement Alliance at uses the following definition:  “Stakeholder Capitalism seeks to create shareholder returns only by creating value for society--customers, employees, suppliers, communities, and the environment." (The EEA is an organization founded in 2009 that focuses on strategies to achieve organizational goals by fostering the proactive involvement of all stakeholders,) This was published in Forbes magazine in an article co-authored by Bruce Bolger, Founder of the Enterprise Engagement Alliance, and Professor Alex Edmans of the London Business School and author of "Grow the Pie," with input from Martin Whittaker, CEO and Co-Founder of JUST Capital. 

Stakeholder Capitalism is not based on the Business Roundtable pronouncement but on the concept of Stakeholder Management theory and practice, which long predates the 2019 pronoucement from the Business Roundtable on the importance of addressing the needs of all stakeholders, as well as the ESG (Environmental, Social, Governance), and CSR (Corporate Social Responsibility) movements. The first book written on the topic was published in 1984: Strategic Management: A Stakeholder Approach by R. Edward Freeman, a Professor of Administration at the Darden School at the University of Virginia. Stakeholder Management is a formal field of academic study in the area of Strategic Management. The Stakeholder Management Interest Group of the Strategic Managment Society of academics has several hundred members worldwide at leading business schools. Click here for a recent meta-analysis of academic research on the subject of Stakeholder Engagement..
Stakeholder Capitalism is not about favoring some stakeholders over shareholders, or pitting one stakeholder against another, as critics define it, but about aligning their interests to grow the pie for the benefit of all, as Professor Alex Edmans of the London Business School describes it in his book, Grow the PieStakeholder Capitalism has nothing to do with politics, left or right, nor with socialism, because government involvement is not required. It's about a people-focused path to sustainable profitability. Almost all Americans, and citizens of most countries, probably agree that they would rather work for, do business with, invest in, or have organizations located in their communities that value all their people, but it's also better for shareholders. In fact, Edmans asserts in a recent article that the arguments against ESG and Stakeholder Capitalism are moot, since it's simply another approach to value creation. 

When implemented as part of a strategic and systematic process, investing in people has a clear return-on-investment. In 2022, the Barron's List of Sustainable Companies once again outperformed the stock market for the fourth year in a row. Similarly, the JUST Capital ETF, managed by Goldman Sachs had outperformed the S&P 500 through the end of 2020 since its inception 27 months earlier. It tracks companies based on the priorities of Americans surveyed annually on their priorites, which include: workers, prosperity, and the planet. Both funds are following a similar trajectory as the six-year Enterprise Engagement Alliance Engaged Company Stock Index study conducted by McBassi & Co., publisher of Good CompanyBetween 2012 and 2018, when the study was ended, the ECSI outperformed the S&P 500 by over 37%. The ECSI tracked the stocks of about 40 companies with high levels of customer, employee, and community engagement using metrics from 13 independent sources. Alex Edmans, the Grow the Pie author, shares his research of "100 Best Places to Work" companies and found they consistently outperformed market returns over more than two decades. His findings recently were confirmed by other researchers. Click here for a library of other research studies on the return-on-investment of Stakeholder Management principles.

Terrence Keeley of 1PointSix, an ESG advisory firm, writing in an October 2022 Fortune article, quotes a conversation with Milton Freidman in which the economist says that he unhesitatingly agrees with the concept of Conscious Capitalism as espoused by John Mackey, Whole Foods Founder. “The differences between (us) regarding the social responsibility of business are rhetorical. Strip off all the camouflage and it turns out we are in essential agreement.” In fact, Freidman is specific in his 1970 New York Times magazine article stating that the corporate responsibility of a company is to make money ehtically. Is it ethical to offload or "externalize" on to society the costs of underpaying people, misleading consumers, leaving abandoned buildings, or polluting the air and water, or discriminating against people?

In the recent documentary, Fishing With Dynamite, even Michael C. Jenson, Professor Emeritus at Harvard Business School and considered a 20th century leader in shareholder capitalism, now says, "Shareholder capitalism is stupid. Stop it." 
EE RoadmapMost of the early proponents of these practices were or are for the most part business people simply in search of a smarter way of doing business.They had no more glorious goals than to develop practical applications that organizations of any size could apply to their business to improve sustainable performance and achieve better experiences for everyone involved, including customers, employees, distribution partners, vendors, and communities. For instance, the International Organization for Standardization added a new clause known as Annex SL to all of its business practices standards requiring a "CEO-led systematic approach to addressing the needs of all stakeholders" when it comes to implementing the standards. 

While Stakeholder Capitalism can involve worker ownership through Employee Stock Ownership Plans, if business principals so desire, Stakeholder Capitalism is not to be confused with socialism. It is purely voluntary, other than disclosures required of US public or large companies in the European Union.
The EEA's Stakeholder Capitalism definition largely parallels the quality people management principles of the International Organization for Standardization published in 2012, and embodied in ISO 10018 people engagement standards published in 2015 and updated in 2020. The principles appear in a Wikipedia definition for Enterprise Engagement published in 2009. These basic principles are now embedded in over 60 ISO business management standards, including the widely followed ISO 9001 quality management standards: the need for the CEO to lead a strategic and systematic approach to achieving the goals of any business practice or standard by involving and addressing the needs of all stakeholders. The focus is on achieving goals with the support of all stakeholders, not on hoping that by focusing on all stakeholders, performance will follow. This is another critical distinction. 

In 2004, the United Nations published the document that probably spawned the use of the term ESG--“The Global Compact: Connecting Financial Markets to a Changing World.” Nearly 20 leading banks and the Swiss government supported this report to provide “recommendations by the financial industry to better integrate environmental, social and governance issues in analysis, asset management and securities brokerage.” The report calls on industry to " develop guidelines and recommendations on how to better integrate environmental, social, and corporate governance issues in asset management, securities brokerage services and associated research functions." It contains many of the principles of Stakeholder Capitalism without using the term. 
Enterprise Engagement and ISO 10018 people engagement standards were developed to provide a roadmap for the practical implementation of a strategic and systematic approach to achieving goals by fostering the proactive involvement of all people, Stakeholder Capitalism is a broader concept focused on the achievement of better and more sustainable results for shareholders and all stakeholders in a way that creates a virtuous circle of prosperity by more strategically investing in people and the environment, the latter of which is outside the scope of Enterprise Engagement. The more money employees have in purchasing power, as the business visionary Lee Iacocca once said, the more of them will be able to buy our products. The less companies externalize their costs on society, the less burden taxpayers will have to bear. The ISO and other practices and implementation processes provide the practical roadmap for any organization in the same way ISO standards have assisted with total quality management when sincerely applied. Stakeholder Capitalism cannot be faked or used as a public relations tactic.
Stakeholder Capitalism, ISO standards and advocates for addressing the needs of all stakeholders base this conviction on the principles supported by research and logic that organizations will achieve greater and more sustainable results by systematically engaging all stakeholders in the mission than if they apply an ad hoc, reactive approach to the interests of people. This systematic and proactive approach was applied to tackle the severe manufacturing quality program in US industry during the 1970s and 1980s. Greater prosperity and improved experiences for all stakeholders is a virtuous byproduct of this approach, not its sole purpose, for without profits there are no resources for investment. Companies run this way actually comply with Milton Friedman's focus on the shareholders, but in a more sustainable manner than the short-termism that often results from efforts to maximize shareholder value at the expense of other stakeholders or longer-term risks. To our knowledge, Friedman did not specify the type of investor whose needs should be addressed, those looking for the short- or long-term gain and at the expense of what future cost to shareholder value?

Ironically, many Republicans have supported Stakeholder Capitalism principles by signing into law in their states statutes for "public benefits corporations". Unlike traditional organizations, "whose primary interest is maximizing shareholder value, public benefit corporations balance stakeholders' pecuniary interests, with the interests of those who are involved and affected by the corporation, such as employees and customers, as well as the advancement of their intended public benefit goal," according to a definition from Cornell Law Schoolwhich closely aligns with the general definition of Stakeholder Capitalism. In fact, 19 Republicans, including Mike Pence, Sam Brownback, Rick Scott, and Nikki Haley all signed into law such statutes in Red states, along with 17 Democrats and one Libertarian in Blue states.

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Opponents Focus on an Illogical Definition of Stakeholder Capital

Almost all opponents to Stakeholder Capitalism base their objections on the Investopedia definition, which is markedly different than that of the Enterprise Engagement Alliance, other proponents, or an analysis of 50 years of usage. The focus of Stakeholder Capitalism is not on equally addressing or balancing the needs of all stakeholders—as the Investopedia definition implies—but on achieving organizational results by engaging and addressing the needs of all stakeholders toward a common purpose: a difference of a few words makes an important distinction.
For instance, management consultant Steve Denning writes in a Forbes piece entitled “Why Stakeholder Capitalism Will Fail”: “Stakeholder capitalism, with its call to balance the claims of different stakeholders on a case-by-case base, was an invitation to allow innumerable decisions in this morass of differing viewpoints, values, attitudes and ambitions, to be made by different people at different levels in the organization.” There are no sources provided for this definition. Stakeholder Capitalism is not about trying to “balance the claims of different stakeholders on a case-by-case basis.” In fact, what Denning writes better describes the current state at most organizations: an ad hoc, reactive approach to trading off the needs of stakeholders rather than one that is strategic and proactive based on establising a common organizatizational purpose. Stakeholder Capitalism is not about focusing on the needs of addressing all stakeholders, as Harvard Law School professors also recently mis-defined it in a Harvard Law School blog, its about focusing on addressing the needs of all stakeholders whose engagement is required to achieve sustainable organizational results. 
This fundamental definition and nomenclature confusion is most apparent in Denning’s article because he inadvertently supports Stakeholder Capitalism when he meant to challenge it. He says that Stakeholder Capitalism misses a better option, what he calls: “customer capitalism. The most successful firms today are those that pursue what Peter Drucker long ago saw to be 'True North' for a corporation: 'there is only one valid purpose of a corporation: to create a customer.' Generating fresh value for customers is the foundation for generating benefits for all the stakeholders. To be sure, Drucker also saw that there were many other things firms needed to take care of, including safety, integrity, legality, sustainability, and inspiring workplaces, but the overriding goal, the raison d’etre of the firm, which all its forces of a firm must single-mindedly support, if the firm to survive, is to create customers.” 
Denning is correct, except that in the nomenclature of ISO and quality management nomenclature, and Drucker for that matter, organizations are made up of both internal and external customers comprised not just of the purchaser but the “internal customers”, supply chain partners, and communities, whose support is needed to deliver those promises.. As noted above and below, Drucker's work helped lay the foundation for Stakeholder Capitalism, as he was among the first to recognize the connections between all parties or stakeholders in the enterprise.

Even shareholder capitalists and conservatives have shifted their views. In the documentary "Fishing With Dynamite," Michael C. Jensen, Professor Emeritus of Harvard Business School, says: “Maximizing shareholder value is a stupid idea. Stop it! And it will impose costs on you, the person who’s trying to maximize the value.” He notes that all stakeholders need to be considered “with integrity,” and that the consequences didn’t occur to him and his coauthor at the time. He does, however, accept blame, noting that “we’re all going to make mistakes.”
Arthur C. Brooks, a Harvard professor and social scientist agrees. “The best organizations, the best societies, the best-run companies, the healthiest families—what do they do? They look out for each other. They think about what everybody needs. That’s what going on in good organizations.”
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The Contributors to Stakeholder Capitalism Principles

Below is a list of people and organizations who have over the years promoted the principles of addressing the needs of all stakeholders in the formulation and implementation of organizational management strategies, mostly at a practical level for their employers and/or clients or in the academic arena. Stakeholder Capitalism and the field of Enterprise Engagement are not to be confused with tactical strategies related to employee and customer engagement or experience. Therefore, many worthy advocates for employee and customer engagement are not included in the list below unless their work focuses on the alignment of these activities toward a common organizational brand, purpose, and objectives. If we have missed anyone, let us know.
The concept of addressing the needs of all stakeholders so well articulated by Edward W. Demings' "14 principles" published decades ago, is unique in that it focuses on having a strategic and systematic approach to engaging and enabling all stakeholders in a way that fosters alignment and eliminates the silos so prevalent in most organizations. While every organization needs specialists in employee and customer engagement, a key principle of Stakeholder Capitalism is that the CEO and C-suite will achieve better results in terms of sustainable performance and better experiences through the application of a strategic and systemic approach to aligning all interests toward common goals. 
Although most of the people and organizations selected for this list have not or might not call themselves proponents of Stakeholder Capitalism, the principles stated or demonstrated in their research, work, or the nature of their business emphasizes the importance of a strategic and systematic approach to addressing the needs of all stakeholders that is the foundation of Stakeholder Capitalism and which to this day remains siloed at most organizations. While the world's business leaders only recently discovered these principles, the people and organizations below worked to develop the framework for their practical application, even if the term remains unknown to many. 

The people and organizations below are listed in an approximate timeline. Please note that there are too many CEOs who have practiced Stakeholder Capitalism principles over the decades to name, so we have highlighted a few of the most notable advocates. Few are known to have used that term as a way of describing their business practices.
Edward W. Deming. The quality management guru’s “14 Points for Management,” published in 1982, called for organizations to address the needs of all internal and external customers (what today we call stakeholders) to achieve quality management goals. There are references to these concepts in his work as early as the 1950s. 
Klaus Schwab.  The Founder and Executive Chairman of the World Economic Forum may be among of the first people to use the term Stakeholder Capitalism about 50 years ago. WEF recently updated its original Davos Manifesto to clearly advocate for business strategies that address the needs of all stakeholders. The Davos Manifesto published in 1973 is among the first formal expressions of this approach to business. 

R. Edward Freeman. His book, "Strategic Management: A Stakeholder Approach," promoted the benefits of addressing the needs of all stakeholders, a concept that came to be known as Stakeholder Theory
Peter Drucker. The highly popular 20th-century management consultant and business author whose set of tenets included a focus on “customer satisfaction, employee engagement and development, innovation, social responsibility and financial strength,” the foundational principles of Stakeholder Capitalism.
Tom Peters. His book, “In Search of Excellence,” also published in 1982, touted a leadership style based on the Seven S Framework, including: "Strategy, Structure and Systems, and Staff, Style, Shared Values and Skills."

Leonard Schlesinger and James Heskett, Harvard Professors, whose research on the Service Value Profit Chain was among the first to identify the link between customer and employee engagement and organizational results.

United Nations Global Impact "Who Cares Wins" Study, published in 2004, which advocates for investors, company, and regulators to address environmental, social, and governance factors in their investments and business practices. 

The Forum for People Performance Management and Measurement, a research group at the Medill School of Marketing Communications from 2001-2009, that undertook multiple research studies indicating the link between customer and employee engagement and financial results.

Don Peppers and Martha Rogers. These two authors and creators of Pepper & Rogers, one of the first agencies in the customer experience space in the 19th century, were among the early advocates of connecting the customer and employee brand. 
Wegman’s. Few organizations have a longer track record of applying the principles of Stakeholder Capitalism.
Herb Kelleher. The deceased CEO of Southwest Airlines was among the early CEOs to recognize the benefits of addressing the needs of all stakeholders in order to generate sustainable profits. 
Marcus Buckingham and Curt Coffman. Their best-selling book, “First Break All the Rulessold millions of copies since being published in 1999 advocating, among other groundbreaking principles, that organizations could achieve better results by better engaging managers and employees in organizational goals. (This is perhaps one of the highest-selling business books whose wisdom remains rarely applied.)
The Gallup Organization at A fundamental principle of the company’s concept of Human Sigma is that “employee and customer experiences must be managed together, not as separate entities.” 

John Mackay and Conscious Capitalism The founder of Whole Foods built its success on the principals of Stakeholder Capitalism displayed throughout each location in word and image. 

B-Lab. An organization that audits and certifies sustainable companies, founded in 2007. It helped promote the establishment of public benefits corporations in the US and abroad. 
McBassi & Company and Laurie Bassi. Bassi's company created the Good Company Index that tracked organizational results based on the level of customer, employee, and community engagement. Her company created the Engaged Company Stock Index for the Enterprise Engagement Alliance at that outperformed the S&P 500 for six straight years.
The Enterprise Engagement Alliance at This organization was founded in 2009 by Bruce Bolger to help create a formal approach to achieving organizational results by fostering the proactive involvement of all stakeholders. It’s books, “Enterprise Engagement: The Roadmap,”  and “Enterprise Engagement for CEOs,” focus specifically on a practical approach to achieving organizational goals based on a strategic and systematic approach to engaging all stakeholders.

Shared Values Movement formally founded in 2011 by Michael Porter and Mark Kramer. 
Kenneth Frazier. The Merck CEO has based his outstanding success on the principles of Stakeholder Capitalism.
ISO (International Organization for Standardization.) The IS0 Quality People Management principles published in 2012, and the Annex SL and ISO 10018 quality people management standards, provide a framework for achieving goals by addressing the needs of all stakeholders in a systematic way. ISO 30414 human capital standards published in 2020 provide a framework for effective employee management and reporting. 
Inward Consulting and Allan Steinmetz. Steinmetz, formerly an advertising executive, was another early pioneer in the concept of connecting employee and customer engagement through his advisory company, Inward Consulting, founded over 20 years ago. 

Hubert Joly. The Best Buy CEO used the principles of Stakeholder Capitalism to turn around the company after the great recession and emergence of Amazon. 
JUST Capital at and its founder Paul Tudor Jones II. JUST Capital is an outreach group formed specifically to advocate for what it now calls Stakeholder Capitalism. Separately, it created the first Exchange Traded Fund based on the work of Laurie Bassi's Good Company Index, which, at least before the March 2020 meltdown, was outperforming standard stock indices.
Larry Fink and Blackrock. The chairman of one of the world’s largest investment companies was one of the first business leaders to support a more sustainable form of capitalism. 
Calvert. This is one of the first leading investment firms to focus on Environmental, Social and Governance investing.
Denise Yohn. This former marketing executive is one of the first-known brand specialists focusing on the importance of linking the customer and employee experience.
Business Roundtable at This coalition of about 180 of the world’s largest companies in 2018 changed its guiding principles to promote business practices that address the needs of all stakeholders. 

First organizations publish ISO 30414 Human Capital standards conforming human capital reports. Starting in 2020, companies in Europe began publishing human capital reports verified by independent third parties. Click here for examples.

European Union Corporate Sustainability Reporting Directive of January 2023 mandates an unprecedented level of stakeholder management disclosures with audited practices and metrics of companies with more than 250 employees or about $44 million in annual sales in the EU. 
Stakeholder Capitalism isn't a revolution nor a public relations schtick. It's a practical approach to organizational management that enhances performance and stakeholder experiences in a sustainable and measurable way. 

Master the “S” of Environmental, Social, Governance (ESG), A.k.a. Stakeholder Capitalism
The Enterprise Engagement Alliance at is the world’s first and only organization that focuses on outreach, certification and training, and advisory services to help organizations achieve their goals by fostering the proactive involvement of all stakeholders. This includes customers, employees, distribution and supply chain partners, and communities, or anyone connected to an organization’s success.
Training and Thought Leadership 
  • Founded in 2008, the Enterprise Engagement Alliance provides outreach, learning and certification in Enterprise Engagement, an implementation process for the “S” or Social of Stakeholder Capitalism and Human Capital Management and measurement of engagement across the organization.
  • The Enterprise Engagement Alliance provides a training and certification program for business leaders, practitioners, and solution providers, as well as executive briefings and human capital gap analyses for senior leaders.
  • The EEA produces an education program for CFOs for the CFO.University training program on Human Capital Management.
  • Join the EEA to become a leader in the implementation of the “S” of ESG and Stakeholder Capitalism. 
EE for CEOsEngagement Digital Media and Marketplaces
Video Learning
The EEA Human Capital Management and ROI of Engagement YouTube channel features a growing library of 30- to 60-minute panel discussions with leading experts in all areas of engagement and total rewards.
EE RoadmapBooks
Enterprise Engagement Advisory Services 
The Engagement Agency helps:
  • Organizations of all types develop strategic Stakeholder Capitalism and Enterprise Engagement processes and human capital management and reporting strategies; conduct human capital gap analyses; design and implement strategic human capital management and reporting plans that address DEI (Diversity, Equity, and Inclusion), and assist with managed outsourcing of engagement products and services.
  • Human resources, sales and marketing solution providers profit from the emerging discipline of human capital management and ROI of engagement through training and marketing services.
  • Investors make sense of human capital reporting by public companies.
  • Buyers and sellers of companies in the engagement space or business owners or buyers who seek to account for human capital in their mergers and acquistions
For more information: Contact Bruce Bolger at or call 914-591-7600, ext. 230.
Earn Big $ In EEA Referral Program
Enterprise Engagement Resources
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