Ed Freeman on Stakeholder Capitalism
How it applies to technology and its implications for 21st Century business
For early subscribers of The Ethical Technologist, you may remember a newsletter discussing Stakeholder Capitalism, an idea first promoted by Ed Freeman, a professor at UVA and colleague of mine, more than forty years ago. Freeman’s basic idea: a core premise underpinning ethical business is the notion that managers need to consider all the stakeholders that touch a business — employees, suppliers, customers, and society at large — in addition to a company’s shareholders. Simply managing towards shareholders, in addition to creating risks for firms, ignores moral responsibilities those firms have to the society in which they operate.
Throughout Ed’s 40+ years in academia, his ideas have spread as far as the boardroom at Blackrock and Business Roundtable. Although there are many detractors, in the fight between ethical business practices and the “greed is good” theory of business, the stakeholder view is winning.
I brought Ed on the Ethical Technologist podcast to talk about stakeholder theory 40 years on, its implications for the technology industry, and the various obligations of different stakeholders to each other, including corporate managers and government regulators. We don’t agree on every issue, but the conversation was provocative and interesting. You’ll want to have a listen on Spotify or wherever you get your podcasts.