Covid-19 Pauses Stakeholder Capitalism

Covid-19 Pauses Stakeholder Capitalism

It is looking really like the old: companies, especially public traded companies, are using workers to balance their books and offset their struggles. Over the last few years, we have read of new lexicons like Stakeholder Capitalism (not the typical Shareholder Capitalism), which came into the business world with a huge flash. Stakeholder capitalism posits that companies must make decisions to balance their fiduciary responsibilities with workers’ welfare, environmental protection, community sustenance, etc. Simply, “Stakeholder capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders. Among the key stakeholders are customers, suppliers, employees, shareholders and local communities”. But it seems that it is all talk.

As the coronavirus pandemic squeezes global industry, companies are increasingly debating whether they pay shareholder dividends or staff salaries. Often, The Washington Post writes, workers are “the first to lose, even as shareholders continue to collect.” With profit margins shrinking, those at the helm must decide who sacrifices the most. Layoffs, executives argue, support a company’s “long-term health.” But critics say that sending millions of dollars to shareholders while axing staff belies the mantra from executives regarding “their concern for employees’ welfare during the coronavirus crisis.”

How do you fire hundreds of workers, and yet in the same earnings call promise to pay dividends?: “Similarly, Levi Strauss announced April 7 that the company would stop paying store workers, and about 4,000 are now on furlough. On the same day, the company announced that it was returning $32 million to shareholders.”

Yet, the same firm was a vanguard of  this new movement. My point is simple: do not pretend, just be real, and do not sign papers you do not believe in. But making your workers feel like they are special, only to kick them out when small heat comes, may not help your long-term mission and reputation. Follow the barons and be frank: no one is special here, it is old century capitalism, and if you expect any special treatment, just go, because in this company, there is no work-life balance, and what matters is how shareholders feel! That way, they would not be expecting vapor promises.

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One thought on “Covid-19 Pauses Stakeholder Capitalism

  1. That is why Donald Trump is the correct guy, because he speaks his mind, he can even change his mind anytime; but he doesn’t leave you in doubt. If Trump wants to slap you tomorrow, he will put you on notice today, so it’s left for you position your cheek well or stay farther away. Trump doesn’t believe in climate change, he made clear, he doesn’t fancy multilateral trade agreements, he made it clear.

    The people who profit from well crafted lies and virtue signalling don’t like that, they rather lie to you, use their deceitful smooth talks to make you feel they are with you, until it’s time to act. They are the ones to first deny anyone who speaks his/her mind, but they are the worse when it comes to action.

    What we have in corporate settings are just slick, smooth talking hypocrites, who are always on hand to join the latest talking points, but no action. If ’empathy’ is trending, they will all line up and keep shouting empathy, even when they don’t know a thing about it. Then if ‘inclusion’ is the new mantra, they will line up and start shouting inclusion, whatever that word means.

    Yes, the big guys were told to change ‘shareholder’ to ‘stakeholder’, and they complied, without hassle; and now people are expecting result…

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