Ed Freeman: Stakeholder Capitalism and the Opportunity Gap

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Manage episode 293798360 series 2933485
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What is the purpose of a corporation? In 2019, the Business Roundtable, which represents almost 200 of America’s leading CEOs, published an answer to this question, committing to lead their companies “for the benefit of all stakeholders,” by which they meant customers, employees, suppliers, communities, and shareholders. The media jumped on this idea, and it made headlines around the world for its contrast to the traditional view of corporations as existing solely to serve shareholders. But in truth, it wasn’t a new idea at all. The notion of “stakeholder theory” or “stakeholder capitalism” has been around since the 1970s, slowly gaining traction and cultural mindshare. And one of the key proponents and developers of the theory has been Ed Freeman, a professor at the University of Virginia’s Darden School of Business and author of numerous books and papers on the topic, including most recently The Power of And: Responsible Business Without Trade-Offs. In a culture that is too quick to condemn business as the root of all evils, Ed is a refreshingly positive voice for the transformative power of entrepreneurism. In our conversation, we reflected on how to improve access to opportunity, how to encourage innovation, and why—almost fifty years after its emergence—the notion of stakeholder capitalism is finally getting a moment in the sun.

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