Corporate Governance, Stakeholding, and the Company: Towards a Less Degenerate Capitalism?

Abstract

Until recently, one might have been forgiven for thinking that the term 'stakeholder capitalism' referred to Britain in the wake of the National Lottery. Such a misconception would now be difficult to excuse, however, as 'stakeholding' has moved to the forefront of contemporary political debate. Invoked by Tony Blair2 as a riposte to the 'enterprise economy' of the Conservative Party, it has emerged as one of 'New' Labour's principal policy slogans. Unfortunately, the exchanges which have followed have been characterized above all else by lack of clarity, with Conservative Party critics, in their struggle to find a coherent response, variously claiming to see in stakeholding a return to the 'corporatism' of the 1970s and a reformulation of their own idea of a shareholding democracy. One commentator, both summarizing and embodying the confusion, has described the idea as 'deeply conservative but also highly radical'.3 Prior to its adoption by New Labour, the concept of 'stakeholding' had been largely confined to the more arcane sphere of company law, where it had surfaced in academic debates about corporate governance. Transported to Britain from the United States of America, stakeholding conceptions of the company are animated by the idea that companies need not and should not be operated solely in the interests of their shareholders. According to its advocates, changes in business culture and company law could and should be made to ensure that in their decision making and policy formulation companies take account of the interests of not only shareholders but all those with a 'stake' in their activities, including employees, suppliers,