Stakeholder Capitalism Defined

  • Last updated on January 12, 2023 at 6:35 PM

At Insights7, we define Stakeholder Capitalism as seeking to enhance shareholder returns by creating meaningful value for customers in a way that also creates/preserves (1) relationship value with employees, suppliers and community; (2) financial, strategic, structure and systems value; and (3) environmental sustainability. 

Our definition is derived from one that was created by Bruce Bolger (Founder of the Enterprise Engagement Alliance), Alex Edmans (Professor of Finance at the London Business School and author of "Grow the Pie") and (CEO of JUST Capital). Their definition, "Stakeholder Capitalism seeks to create shareholder returns only by creating value for society – customers, employees, suppliers, communities, and the environment" was published in Forbes in August 2020.  They go on to say "Responsible businesses don’t serve society only through charitable donations and low prices (which may erode profits), but through an uncompromising commitment to innovation and excellence – pioneering products that transform citizens’ lives for the better, providing employees with a stimulating place to work, and preserving the environment for future generations. By doing so, a company doesn’t just serve society, but becomes profitable as a by-product."

Stakeholder Capitalism is tightly linked to Sustainability. Click here to reference the Sustainability definition.


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