- Stakeholder capitalism is the economic notion that a company should prioritize all of its stakeholders (like employees and customers), and not just its shareholders.
- In August 2019, CEOs of top companies like JPMorgan Chase, Walmart, and Apple, declared stakeholder capitalism the economy’s guiding principal in an open letter.
- In the year that’s passed since the open letter, do Americans think leaders are still prioritizing shareholders above all else?
- JUST Capital, an independent research firm founded by the billionaire investor Paul Tudor Jones, surveyed some 4,400 Americans and found that more people think companies are indeed prioritizing their employees.
- However, a higher percentage still think shareholders are a company’s top priority.
- Visit Business Insider’s homepage for more stories.
In August 2019, CEOs of 181 top companies came together and declared stakeholder capitalism the path forward in an open letter titled “Statement on the Purpose of a Corporation.”
Stakeholder capitalism is the notion that companies should prioritize all of its stakeholders (like employees and customers), and not just its shareholders.
It marked a new chapter for corporations, leaving behind Milton Friedman’s shareholder primacy, the belief that a company’s sole responsibility is profit for its shareholders.
In the year that’s passed since the letter’s publication, do people think there’s been a real difference in which stakeholder companies prioritize?
New research from JUST Capital, an independent research firm founded by the billionaire investor Paul Tudor Jones, suggests there has been.
In both 2017 and 2018, 20% of Americans believed workers were a company’s top priority, compared to 60% who felt it was shareholders.
But in 2020, that shifted significantly: 37% of Americans think workers are a company’s top priority, and 46% think it’s a company’s shareholders, according to JUST Capital’s poll of 4,400 Americans in July and August.
JUST Capital CEO Martin Whittaker said the findings didn’t surprise him, as many companies have taken steps to protect the health and economic wellbeing of their employees amid the pandemic.
“This is not about workers versus shareholders. It’s about how we can grow the pie more effectively, for more stakeholders,” he said.
“We hope this trend data is starting to signal this shift, and that companies will continue to put the era of shareholder primacy behind us and instead embrace an operating model that serves all stakeholders, and most importantly, workers,” he added.