10 Things You Should Know about Stakeholder Capitalism
Published September 2020
10 Things You Should Know about Stakeholder Capitalism is a new narrative-style podcast mini-series from the Institute for Corporate Transformation hosted by Amanda Kathryn Roman and Nathan Havey. Episode 1 features the Economics of Mutuality, with Jay Jakub, Chief Advocacy Officer for the EoM movement.
It tells the story of Project Maua in Kenya, which embraces the Economics of Mutuality to combine the business goal of creating a new route to market with the social goal of improving the income and wellbeing of impoverished communities by expanding the distribution of Wrigley products through local micro-distributors and solving a key “last mile” challenge. Read the full case study here. An extract from the podcast has been transcribed below.
[Nathan] For most companies, ‘doing good’ is about writing cheques to charities or engaging in other activities that are not core to the profitable execution of the business. This is what Friedman opposed. But, if you expand the scope of what is counted as profit and loss on the balance sheet of a company, then a very different picture emerges. Not because you are, as Friedman put it, ‘part of the contemporary crop of reformers’, but because you can see, like Jay Jakub and his team, that the continued profitable operation of your company demands it.
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[Jay] The rules have changed in the global economy. If you don’t want to be sub-optimal in the way you operate your business, you need to expand your definition of performance and include – with financial capital – social, human and natural capital. There are ways to measure these things with a high level of accuracy, but also with simplicity and uniformity so that you’ve got the tools and techniques at your fingertips.”
Last year, I looked at some interesting statistics. Of the largest 100 economies of the world, 69 of them were corporations. Given all of the challenges and problems society and the environment now face, it’s unconscionable that corporate leaders wouldn’t step up and play their role.
And now, through the Economics of Mutuality, we can show how being more responsible actually makes you more resilient, more sustainable – and actually can make you even more profitable as you go forward. But if you’re all about trying to extract value instead of co-creating it, you’re going to go down as you go forward.
