Pathways in Stakeholder Research

Stakeholder-focused research seeks to explain relationships among firms and stakeholders, using approaches that predominantly follow normative, instrumental, or descriptive pathways. Following circulation of the 1963 Stanford Memo and the 1984 publication of Freeman, the stakeholder perspective has become a sizable area of research in diverse fields, with growing influence in the business community as indicated in 2019 by the commitment of the US Business Roundtable to stakeholder principles. Still, the tendency to offer stakeholder theory as a replacement for neoclassical theories of the firm somewhat limits its adoption. An approach more likely to advance the trend toward an increasing stakeholder orientation is one of theory collaboration, in which researchers explore how self-interested action in the market system can be tempered by others-interested action. To this aim, the three stakeholder research pathways might be extended, as follows: (a) adding a moral and ethical leadership component to normative stakeholder theory research to move from a philosophy-centric literature toward one that better explains the how and why of normatively based actions toward stakeholders; (b) adopting a stakeholder-work-focused approach to instrumental stakeholder theory research to afford it the benefits of moral neutrality; and (c) returning the focus of descriptive stakeholder theory research to stakeholders as “natural persons,” as compared to corporations as “juristic persons.” With these extensions, scholars can encourage the ongoing reorientation in society toward the stakeholders of firms.

Walmart and Guns: A Case Study in Modern Corporate Governance

In August 2019, the Business Roundtable issued a new Statement on the Purpose of a Corporation. The statement, signed by 181 CEOs, including Doug McMillon of Walmart, declared that corporations should seek to serve the interests of all stakeholders—a marked departure from the Roundtable’s prior embrace of shareholder primacy. This shift in position reinvigorated debate among business and legal scholars about the proper purpose of a corporation. Using Walmart as a case study, this Note argues that corporations are indeed adopting a more flexible and responsive conception of corporate purpose. This Note begins with a discussion of corporate governance theories, detailing four distinct visions of corporate purpose and control. It then examines Walmart’s decisionmaking process regarding ammunition and firearm sales in the wake of a tragic mass shooting at one of its stores. Finally, it concludes by reconciling Walmart’s conduct with the prevailing theories of corporate governance, ultimately finding team production theory— which calls for the balancing stakeholder interests—to be most applicable.

Purpose in der Praxis: Insights einer Leitbildstudie aus der deutschen Wirtschaft

Egal ob Business Roundtable in den USA oder Weltwirtschaftsforum in Davos – die Diskussion rund um einen über die Gewinnmaximierung hinausgehenden Purpose gewinnt weltweit an Dynamik. Doch wie steht es eigentlich um den Purpose in der deutschen Wirtschaft? Dieser Frage geht eine Untersuchung der Leitbilder großer und mittelständiger deutscher Unternehmen nach. Die Ergebnisse zeigen, dass die Auseinandersetzung mit einem Purpose rasant an Bedeutung gewinnt, aber noch ein weiter Weg zu gehen ist.

Anforderungen an eine echte Purpose–Orientierung von Unternehmen

Dieser Artikel behandelt vier grundlegende Fragen an eine Purpose-Orientierung von Unternehmen. Er bezieht sich dabei auf die Stellungnahmen bedeutender Persönlichkeiten und Organisationen wie den amerikanischen Business Roundtable, Klaus Schwab und das von ihm geleitete World Economic Forum, Larry Fink, CEO von BlackRock, sowie auf aktuelle Literatur. Es werde folgende vier Fragen behandelt: 1. Was ist Purpose und woher kommt der Druck im Hinblick auf eine Purpose-Orientierung? 2. Worin besteht das unternehmerische Interesse an Purpose? 3. Was sind Anforderungen an eine echte Purpose-Orientierung? 4. Welche Aufgaben und Herausforderungen ergeben sich hieraus für das Controlling?

Understanding Independence: Board of Directors and CSR

On August Business Roundtable (2019), the Business Roundtable redefined the purpose and social responsibility of the corporation. Yet, this statement must be followed by substantial changes in the business models of corporations for it to avoid becoming empty rhetoric. We believe that the figure of the independent director may be one of the catalysts needed for this change of paradigm for corporations. In spite of the positive correlation between Corporate Social Responsibility (CSR) and board independence, the development of the independence of boards during the last decade has not lead to the expected CSR results. Academics and regulators point to a weak definition and the non-standardized measurement of both independence and board independence (BI) as one possible explanation, and agree that a broader definition is needed. This paper aims to contribute to this debate. We develop a second-generation definition of independence based on a positive approximation to the concept by integrating an Aristotelian perspective of virtue ethics with the best practices of corporate governance. Thus, we define independence as a virtue guided by practical wisdom, that implies autonomy and autarky and which enables a person to act with integrity, fairness and truthfulness. In the context of corporate governance, independence is associated with an honest disposition to serve. Our proposal has political implications for supervisors that make decisions relating to the suitability of board members.

Epilogue

This concluding chapter discusses the National Association of Manufacturers' (NAM) relevance in contemporary times. It shows that NAM is still a going concern. It has survived and adapted to new circumstances, and it has a purported membership of 14,000. It also keeps a lower profile. NAM is no longer the go-to “voice of business,” but it still partners up with the US Chamber of Commerce and the Business Roundtable. In other ways, however, the current NAM resembles its old historic self, despite the drastically different economic and political climate of the twenty-first century. It continues to promote development, offering seminars, data, and other resources to help new manufacturers navigate the new economy. But NAM also has to contend with new challenges in the twenty-first century, as it walks a fine line with regard to President Donald Trump.

Analyzing the business roundtable statement on the purpose of a corporation and linking it to corporate governance

The 2019 Business Roundtable Statement on the Purpose of a Corporation, endorsed by 183 CEOs of major U.S. companies, is not such a dramatic break from the past, but rather the next step in a steady retreat from a purely financial approach and an evolution to embrace a stakeholder approach, which is now gaining more and more lip service. The major purpose of this paper is to analyze this Business Roundtable Statement and relate it to three major corporate governance issues: CEO pay, non-financial performance metrics, and sustainability reporting. Then the paper introduces the Commonsense Corporate Governance Principles, which were initially published in 2016 and updated with Version 2.0 in 2018, sponsored by 21 CEOs of major U.S. companies. These Principles provide significant guidance and recommendations for corporations, boards of directors, shareholders, and other stakeholders to follow if they want to create an environment-friendly to meet the fundamental commitments in the Business Roundtable Statement. Accordingly, the major sections of this paper are introduction, CEO pay issues, non-financial performance metrics, sustainability reporting, corporate governance impacts, key points in both versions of the Commonsense Principles, key changes in the Commonsense Principles 2.0, discussion, and conclusions.