Stakeholder Capitalism in Times of Crisis

Stakeholder Capitalism was in the spotlight when we wrote about it at the end of last year. The group of leading US companies represented by the Business Roundtable (BRT), in their statement on the purpose of a corporation in August 2019, had made a high-profile commitment to serve all stakeholders: customers, employees, suppliers, communities and the environment in addition to shareholders. Corporate purpose was set to be at the heart of the debate at the World Economic Forum in Davos (and climate change emerged as its major theme). At the time, some heralded the arrival of a new era of friendlier capitalism and others were sceptical. Since then, the global COVID-19 pandemic has affected everyone.

In this article we examine how directors can look at their duties in a time of unprecedented crisis and whether stakeholder concerns must take a back seat, before considering what the COVID-19 crisis tells us about the meaning of “stakeholder capitalism” and the evolution of the purpose of a company.