Democratic Stakeholder Representativeness

Abstract

Stakeholder theory has been advocating the inclusion of affected parties in organizational processes to increase the legitimacy and effectiveness of organizational governance. However, organizations can fail to achieve these objectives if there is no systematic link between stakeholders and their constituency. Based on democratic notions of representation, we argue that democratic stakeholder representativeness is an essential virtue of stakeholder governance processes. We conceptually derive authorization and accountability as normative elements of stakeholder representativeness and operationalize the construct by proposing empirical indicators of stakeholder representativeness as well as procedural guidance on their adoption in a practical governance context. By doing so, we contribute to the advancement of practical stakeholder governance as well as to the public management and organizational theory literature by specifying and operationalizing a construct that had previously been only vaguely defined.