Will the pandemic accelerate stakeholder capitalism?

Good morning.

For the last three months, I have repeatedly asked, and have been asked, the same question: Will the pandemic accelerate the business community’s move toward stakeholder capitalism? Or slow it down as companies focus on short-term financial pressures?

The answer wasn’t obvious three months ago. But with each passing week, it is becoming more so. Most of the forces that have led to the stakeholder movement have become stronger during the pandemic. Among them:

1. The shift toward talent as the most important source of corporate value has continued. This trend could have been weakened by historic levels of unemployment, which have made labor plentiful. But plentiful labor is not the same as plentiful talent, and the pandemic seems to be leading an increasing number of talent-forward companies to take an “employees first” approach.

2. Demands for systemic change have intensified. The pandemic exposed flaws in our hyper-efficient approach to global markets, and it is deepening the divisions—both within countries and between them—that undercut support for the current economic system. (See Thomas Friedman’s interesting take on this here.) Business leaders need to respond, or risk losing their license to operate.

3. The dearth of leadership is ever more evident. In the U.S. in particular, our political ideologies have proven poorly suited for the moment. Practical-minded business leaders can, and should, step up to help fill the gap.

We will be exploring these themes Tuesday at a virtual gathering of CEOs, held in partnership with McKinsey, that includes Danone’s Emmanuel Faber, Levi’s Chip Bergh, Patagonia’s Rose Marcario, RBC’s David McKay, Edward Jones’ Penny Pennington, Guardian Life’s Deanna Mulligan, Henry Schein’s Stanley Bergman, and Royal DSM’s Geraldine Matchett, among others. I will report back here.

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Alan Murray

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