Sustaining a Commitment to a Stakeholder Primacy Business Model

Abstract

Investors, politicians, media, and others are asking for a shift to a stakeholder primacy governance model from the current shareholder primacy model While companies are making changes to put more emphasis on other stakeholders (e.g., employees, community, government, customers, and suppliers), execution of this transition has many hurdles. This article discusses many of the practical issues of both becoming more multi-stakeholder sensitive as well as the complexities of managing to a stakeholder primacy business. The focus is on the practical considerations and addresses them from multiple perspectives including measurement and compensation. Finally, it provides some ideas that might be considered for the development of tools to better address the decision-making balancing act inherent in a stakeholder primacy model.