Transcript Document
Stakeholder approach to
Corporate governance
Jana Klokočníková
Jiří Brejcha
FSV IES 2007
Content
Bit of Definitions
Historical development of the stakeholder approach
Classification and Division of stakeholders
Core questions when applying the stakeholder
model
Conclusion
Bit of Definitions
Stake
=
an interest or a share in an undertaking
(i.e. legal right, moral right, ownership)
Stakeholder
=
A group or an individual, that has either a
material or immaterial stake in the
corporation
(R. Freeman (1984): Strategic Management. A Stakeholder Approach)
Historical development of the
stakeholder approach
Production view of the firm
resources or bought products or services
Managerial view of the firm
ownership vs. control
Stakeholder approach
shareholders vs. stakeholders
The production view of the firm
Suppliers
Corporation
Customers
The managerial view of the firm
Shareholders
Suppliers
Corporation
Employees
Customers
The stakeholder view of the firm
Government
Shareholders
Suppliers
Corporation
Creditors
Customers
Employees
Local
communities
Enviromental
groups
Classification and Division of
stakeholders
Classification
Generic groups of stakeholders
Specific groups of stakeholders
Division
Internal vs. External stakeholders
Primary vs. Secondary stakeholders
Internal vs. External stakeholders
Government
Shareholders
Suppliers
Corporation
Creditors
Customers
Employees
Local
communities
Enviromental
groups
Primary vs. Secondary stakeholder
groups
Government
Shareholders
Suppliers
Corporation
Creditors
Customers
Employees
Local
communities
Enviromental
groups
Core questions when applying the
stakeholder model
Who are our stakeholders?
What are their stakes?
What opportunities and challenges are presented to
our firm?
What responsibilities does our firm have to all its
stakeholders?
What strategies or actions should our firm take to
best deal with stakeholder challenges and
opportunities?
Employees
Stake
livelihood in the present day
pensions ensured by the company’s pension scheme
whistle-blowing procedures
training programs, working conditions, equal
opportunities, employees share scheme
trade unions
Creditors
Stake
the company’s ability to repay their debts
to maintain the confidence of these providers
Suppliers
Stake
to be paid in a timely fashion for the goods and services
they supplied
interest in the continuance of the company
treat their suppliers with understanding and ensure
that they settle their debts on time
Local communities
Stake - in the companies which operate in their
region
in the interest of sustained employment levels
act in an environmentally friendly way
Environmental groups
Stake
the companies operate to both national and international
environmental standards (CERES Principles and the
Global Reporting Initiative (GRI) Sustainability Guidelines)
environmentally responsible company will not
subject its workers to potentially hazardous
processes without adequate protection, will not
pollute the environment, and will, where possible,
use recyclable materials or engage in a recycling
process
Government
Stake
to make sure the companies act in a socially responsible
way taking account of socially, ethical and environmental
considerations
to analyze corporate trends for various purposes such as
employment levels, monetary policy, and market supply
and demand of goods and services
looking at various aspects to do with fiscal policy such as
capital allowances, incentives for investing in various
industries or various parts of the country, and of course
the taxation raised from companies
Conclusion
Three values of the stakeholder model
Descriptive
Instrumental
Normative
Conclusion
the involvement of shareholders and/or
stakeholders depends on national laws and
customs
‘…directors as a board are responsible for
relations with stakeholders; but they are
accountable to shareholders…’
(Hampel, R. (1998): Committee on Corporate governance: Final report,Gee &
Co. Ltd.)
References
Carroll, A.B.: Business and society. Ethics and stakeholder
management. South-western publishing Co. 1989, Ohio.
Colley, J.L., Doyle, J.L., Logan, G.W., Stettinius, W.: Corporate
governance. The McGraw-Hill Companies, Inc. 2003, the
United States of America.