Stakeholder Capitalist

EEA PurposePoint CEO Profile: Charlie Malouf’s Journey to Purpose Leadership

This Enterprise Engagement Alliance YouTube Show tells the story of one executive’s path to Purpose Leadership and how its principles helped turn around a struggling company.
Charlie Malouf’s journey to Purpose Leadership didn’t come easily. He is CEO of Broad River Retail,  one of the largest and fastest-growing, independently owned and operated Ashley furniture store licensees, founded in 2023, with more than 30 stores and growing in the southeast US.
Broad River Retail was doing just fine, he says, and had even survived the Great Recession when, in 2015, the company nearly collapsed, due mostly to a failed ERP (enterprise resource planning) software deployment and a poorly timed acquisition.
“Had we not broken all our bones, I don't think we would have had the willingness to test and experiment like we did. I mean, if you reframe failure not as an identity, but as a data point, that just became information for us to learn how we could grow and get better. So, it's the best thing that ever happened to us.”
In searching for a new path, Malouf says he was inspired by the Conscious Capitalism movement.  He conducted a listening tour of the stores. “We started by developing a new purpose statement and by investing in our people following the spirit of abundance and mutual prosperity. We went from a human resources-based company to a human capital company, and started with raising the pay for our employees and developing career paths for everyone.”  
He notes that were his company publicly held, the share price surely would have collapsed on the decision to increase employee pay at a time when the organization was in a near crisis mode.  Being a private company, it “wasn't shackled by Wall Street expectations. We’re running this company for the next quarter century, not the next quarter, and so we can take a long-term view. S what we did we thought was right and fair.”
 

Joe Hinrichs, CEO CSX: A Profile in Purpose Leadership

Is there a new paradigm for 21st century leadership—enhancing returns for investors only by creating value for customers, people, supply chain and distribution partners, communities and the environment. Based on this Enterprise Engagement Alliance YouTube show, the answer is yes: the challenge is that many purpose leaders are too busy running their businesses and putting the spotlight on their stakeholders to proselytize a new leadership model.
 
In this 30-minute Enterprise Engagement Alliance YouTube show, CSX CEO Joe Hinrichs outlines the roadmap for stakeholder management implementation by sharing the lessons of his impressive rise up the corporate ladder at Ford to become president of the automotive division. He left 18 months ago to take the helm at CSX. Despite economic headwinds that have affected the company’s revenues, the company’s stock is up about one-third since Hinrichs took the helm in September 2022.

Stakeholder Capitalism Update

In March 2022, the Enterprise Engagement Alliance featured a YouTube show with three leaders in the Stakeholder Capitalism and related ESG (Environmental, Social, Governance) to assess the state of the movement. Now 18 months later, we bring back two of the three panelists to share their views of the future and their views haven’t changed: the shift to a stakeholder mindset is inevitable but will take many forms. How much has changed in the state of stakeholder capitalism and the related issues of ESG over the last 18 months since the beginning of the “anti-woke” campaign?
To find out, we turned to R. Edward Freeman, author of the seminal 1984 book, Strategic Management--A Stakeholder Approach, and Martin Whittaker, CEO of JUST Capital, an authority on corporate stakeholder performance. They were panelists on the March 2022 program. Summary of findings: The roots of Stakeholder Capitalism. According to R. Edward Freeman, he wrote his 1984 book "Strategic Management, a Stakeholder Approach," based on a desire to better understand how business works. He never thought of it as an ideology but rather a system to improve business by harmonizing the interests of stakeholders toward a clear purpose. “Clearly business can be a force of good,” he emphasizes.
1. What is the status of the anti-woke movement in terms of stakeholder capitalism and ESG implementation in the US and overseas? Martin Whittaker believes the distorted definition of stakeholder capitalism is simply being used by candidates to get attention and that it is not slowing down efforts by companies to look more strategically at how they create value through stakeholders. In fact, the largest number of corporations ever engaged in a pre-release review of the organization’s Just 1000 rankings this year, demonstrating the heightened interest in the subject. (When the Good Company Index by McBassi Inc. attempted a similar type of ranking process in the 2000s, it was never able to get many companies to respond. The index was used by the Enterprise Engagement Alliance to create a mock Engaged Company Stock Index that outperformed the S&P 500 by over 38% over six years.) Whittaker notes that the Strive Asset Management so-called anti-Stakeholder Capitalism investment fund, which recently topped $1 billion in holdings thanks in part to its former owner Vivek Ramaswamy’s presidential candidacy, holds many stocks in the Just Capital top 1000. (Some observers explain this by observing that Strive is essentially a vehicle for undermining ESG efforts in proxy fights.)
2. Do business leaders or the public generally understand the distinction between the rhetoric and practical application of a process to enhance the enterprise and stakeholder experiences. The panelists agree that management is showing a greater interest in stakeholder thinking but admit that silos and a lack of understanding of the relationships between different stakeholders remain major impediments. Freeman underlines that one of the prime obstacles is the continued belief that “it is all about the money in business, when clearly that is not the case.”
3. Do businesses lack formal expertise to move from talk to action? The panelists observe that it’s an organic process based on each organization, and that there is no one system. Whittaker notes that beyond having a general framework based on evaluating an organization’s commitment to the people investments most valued by Americans analyzed by an ongoing survey—workers, customers, supply chain and distribution partners, the communities, and the environment—each organization will find its own way. The process, says Whittaker, starts with a gap analysis, and the determination of where to start. The panelists agree that organizations don’t have to take on the entire process at one time. Based on his experience working with thousands of managers, Freeman is convinced that companies are beginning to lean into stakeholder thinking and both agree that it starts with listening to stakeholders. To Freeman, “it would be a good idea, for instance, if human resources had a better understanding not only of the welfare of employees but of the stakeholders they affect.”
4. What is the potential impact of the European Union Corporate Sustainability Reporting Directive? The panelists agree that the overall attention the law will place on stakeholder thinking and the requirement to make specific disclosures will have a positive impact on what both believe is the inevitable push toward more focus on harmonizing the interests of stakeholders and greater transparency. To Contact the Speakers/Host Martin Whittaker, CEO Just Capital at https://Justcapital.com, mwhittaker@justcapital.com R. Edward Freeman, Professor Darden School of Business, University of Virginiafreemane@darden.virginia.edu Bruce Bolger, Founder, The EEA at https://TheEEA.orgBolger@TheEEA.org

The Art and Science of Job Design

Business and social media are filled with articles about employee engagement and experience: much less attention is given to the concept of job design—the purpose, goals, and objectives of a job and a specific focus on the daily purpose, goals, objectives, and specific tasks of a job in order to make them as productive and individually satisfying as possible.
Rather than focusing on the traditional topics related to employee engagement and experience—leadership, communication, rewards and recognition, DEI (diversity, equity, inclusion)—this program focuses specifically on what people do every day in a way that makes them happier to do the work and therefore more likely to productively produce highly quality work.
The expert panelists are Thomas Bertels, Founder and Principle of Purpose Works Consulting LLC, and Ellen G. Frank-Miller, PhD, Founder and CEO of WORC (Workforce & Organizational Research Center). Both are pioneers in the area of job design. Here is a summary of some of the key insights from the program: • Job design experts help organizations not only develop effective jobs that foster retention, productivity, and quality but to create a culture based on purpose, autonomy, and a sense of ownership. 
Job design goes beyond rewards, recognition, or employee experience to determine the actual purpose, goals, and objectives of a job within the context of its external or internal customers and the organizational mission and vision. 

Negotiating Labor Agreements that Align with Stakeholder Capitalism

At a time of increased union organizing and growing demands for increased worker voice, there are problem-solving approaches to collective bargaining that can up the interests of key stakeholders in the commercial, non-profit, and government sectors. To help management on both sides gain the knowledge and skills needed to have more successful bargaining outcomes, the Heller School of Business has created an Executive Education Program for Negotiating Labor Agreements.
The sad truth is that labor-management distrust is so why in the US, we need to start with incremental steps. 
The panelists are:
• Joel Cutcher-Gershenfeld, Florence G. Heller Professor and Social Impact MBA Director.
• Dennis Dabney, Senior Vice President for National Labor Relations, Kaiser Permanente (retired) and Labor Relations Director, HR Policy Association.
• Kris Rondeau, Co-lead organizer of the Harvard Clerical and Technical Union, the SHARE union, and others; Director of AFSCME, New England.
• Søren Viemose, advisor, mediator, and co-founder of Denmark's Kalovig Center for negotiations and conflict resolution.Negotiating Labor Agreements that Align with Stakeholder Capitalism

Does the Stakeholder Capitalism Movement Create Environment for Union and Management Reset?

This Enterprise Engagement Alliance YouTube Show, “Unions in the Emerging Era of Stakeholder Capitalism,” suggests that a new generation of both management and labor leaders could lead to an era of greater cooperation between labor and management. What is lacking are trust and business and labor leaders knowledgeable about the potential benefits of labor-management collaboration and how to fully capitalize on it. Unions with a constructive mindset can create significant value for organizations in terms of worker voice, training, healthcare, safety, wellness, and worker onboarding, and senior management can benefit by having a more open mind to the role that unions can play in sustainable performance. These are some of the key findings of the Enterprise Engagement Alliance YouTube show, “Unions in the Emerging Era of Stakeholder Capitalism,” featuring Thomas Kochen, George Maverick Bunker Professor Emeritus of Management at the Sloane School of Management at MIT and Larry Beeferman, Independent Consultant and Fellow at the Harvard Law School Center for Labor and a Just Economy.

The Overlooked Role of Worker Voice

An expert on work-life issues and labor relations asserts in this Enterprise Engagement Alliance YouTube Show that worker voice is a generally overlooked source of value creation and risk reduction. This article and webinar provides an overview of the opportunities, benefits, challenges, and steps to success.
Companies frequently say that workers are their No. 1 asset, but what does that truly mean in practical terms? It stands to reason that if this is so, employees would be central to all key decisions related to innovation, continuous improvement, quality, productivity, culture, wellness, and safety. The question is: to what extent do organizations truly engage employees not only in providing feedback on their current level of engagement and satisfaction with the culture but gaining their active participation in crafting critical strategies consistent with the organization’s purpose, values, goals, and objectives.
The answer is very little, says, Larry Beeferman, Independent Consultant and Fellow, at Harvard Law School Center for Labor and a Just Economy, who joined the Enterprise Engagement Alliance as a guest on the EEA YouTube show to share the findings of his recent paper, “Managers: Attuned to Change but Tone-Deaf to Worker Voice?” It provides a compilation of insights from a review of research and papers on this subject.
Very few companies, he underlines, and that means their CEOs, have a clear understanding of worker voice, the benefits, what it involves, and why it’s so important to organizational success. Here’s a summary of his perspective and recommendations. 

Making a Business of Helping Organizations Transition to Stakeholder Capitalism With Kent Gregoire

If the implementation of Stakeholder Capitalism requires a strategic and systematic process, it stands to reason that the emergence of this field will foster the creation of a new field of experts, services, and technology, much as occurred in the field total quality management, customer relationship management, loyalty management, and many others. Along with the Enterprise Engagement Alliance and its Engagement Agency division, Stakeholder Business is among the first businesses specifically launched to help guide CEOs seeking to make the shift to Stakeholder Capitalism.
We interview Kent Gregorire, a long-time Stakeholder Capitalism advocate, on the business he is creating to help CEOs make the shift.  
The company’s name says it all: Stakeholder Business. Kent Gregoire founded the firm last year with Meghan French Dunbar and Nathan Havey on the premise that Stakeholder Capitalism offers a competitive advantage, and that, while the benefits of it are clear, how to implement the model to realize those benefits is not. The company says it helps “leaders with proven strategic guidance on exactly what Stakeholder Capitalism is and how to implement it to build a thriving stakeholder business.”
The conversation covers Kent's journey in the quest to promote a better form of capitalism and how his new company creates value for organizations. 
 

The European Union Corporate Sustainability Reporting Directive Will Have Significant Worldwide Impact

Who would have ever guessed that the European Union or any government body would in effect make Stakeholder Capitalism a matter of mandatory disclosures?  Not me.

Bart Houlahan of B Lab: Stakeholder Capitalism Requires a Business Operating System

The current controversy about Stakeholder Capitalism and ESG (Environmental, Social, Governance) will eventually die down because it’s simply about better business and is non-partisan. B Lab nearly doubled the number of certified companies during the pandemic because of the surprising focus on creating value through people…Certified B Corporations did much better during the pandemic than most companies and having a B Corp Certification can help enhance an organization’s valuation upon exit. These are the highlights of my conversation with Bart Houlahan, Co-Founder of B Lab, a not-for-profit organization that was among the first to strategically promote the concept of Stakeholder Capitalism long before that name became better known. See the video show on the Enterprise Engagement Alliance at TheEEA.org YouTube channel.