The moral foundations of stakeholder capitalism

Abstract

The Irish revolutionary Sean Lemass wrote in 1927 that wars always end with necessary compromise. ‘We must,’ he warned, ‘forget the petty conceits that bedevil us like rouge on the face of a corpse and face the facts, the hard facts, we must overcome.’ Lemass, instrumental in sparking a civil war, went on to become the leader of Fianna Fail, the Soldiers of Destiny, a party that has dominated Irish politics for close on a century. The quote has lost none of its all-encompassing resonance rhetorical power. It facilitates reflection on all existential crises, whether these are personal or communal, social, political, economic or environmentally driven. Its applicability transcends national boundaries. It forces us in the starkest terms possible to confront ourselves. Who are we? What do we seek to achieve? What is the purpose? Can it be justified on normative grounds that go beyond self-interest? The quotation is particularly appropriate to base analysis on the compromises brokered at the fiftieth World Economic Forum (WEF), recently concluded in the Swiss resort of Davos. While these compromises may not end the climate wars, the war on truth and fake news, they do reposition the battleground. Much media reporting privileged bombastic sloganeering from an American president to an equally shrill Scandinavian teenager. President Trump’s denial of urgency in addressing global challenges and Greta Thunberg’s furious objections to governmental inaction on climate change hijacked debate on the underlying science itself and for what purpose we should apply it. The claim and counterclaim threatened and did overshadow a significant, and potentially transformative, initiative. For the first time, from industry came recognition that sustainable development and societal well-bring necessitated a new and binding social contract. In addition, came acceptance that action on climate could not be divorced from the United Nation’s broader Social Development Goals. These, in turn, necessitated the implementation of global tax reform to ensure national exchequers have the revenue to build or enhance physical and social infrastructures, thereby addressing the scourge of rising inequality. Moreover, corporations had a moral duty to negotiate and uphold this contract. Holistic and measurable stakeholder engagement measures were accepted as essential to embed corporate self-interest and rebuild societal trust. To achieve transformative objectives necessitates acknowledgement of past failure, humility and a commitment to change. Rouge alone cannot disguise the reality of death. In sharp contrast to political timidity, corporations have recognised time is a luxury they can no longer afford. The rise of populism means sovereign risk can be added to the travails facing the corporation. With the Doomsday Clock that measures the aggregated risks facing the planet now sitting at twelve seconds to midnight, the WEF forged a partnership at Davos with the United Nations (UN). Graciously, the UN acknowledged the ‘absolutely vital’ role of the Swiss-based organisation in brokering global solutions to intractable existential questions. The UN Secretary General, Antonio Guterres, told the Davos audience that