Several leaders of the World Economic Forum have published Stakeholder Principles in the COVID Era, characterizing the “business community’s contribution” as “to be leaders of responsiveness and stewards of resilience.” Nice cadence—I like it. But what does it mean in practice?
The introduction to the Principles emphasizes the authors’ recognition of the profound impact of COVID-19—from employees whose health and safety is challenged just by performing their jobs to suppliers and customers, all of which face intense pressure. the authors believe that, by “doing all we can to coordinate our work, we can ensure that our society and economy get through this crisis and we can mitigate its negative impact on all of our stakeholders.” Importantly, as leaders of the business community, the authors also “accept our responsibility to address these crises.” They identify as the first priority the imperative to “win the war against coronavirus. We need to do that while doing all we can to help our stakeholders now and, at the same time, to avoid a prolonged economic impact in the future.” Finally, echoing the new Statement on the Purpose of a Corporation adopted last year by the Business Roundtable (see this PubCo post), they affirm that they “will continue to embody ‘stakeholder capitalism’ and do all we can to help those who are affected, and help secure our common prosperity.”
The authors then state the following as Stakeholder Principles in the COVID Era:
- “To employees, our principle is to keep you safe: We will continue do everything we can to protect your workplace, and to help you to adapt to the new working conditions
- To our ecosystem of suppliers and customers, our principle is to secure our shared business continuity: We will continue to work to keep supply chains open and integrate you into our business response
- To our end consumers, our principle is to maintain fair prices and commercial terms for essential supplies
- To governments and society, our principle is to offer our full support: We stand ready and will continue to complement public action with our resources, capabilities and know-how
- To our shareholders, our principle remains the long-term viability of the company and its potential to create sustained value”
The authors also underscore that they plan to continue their “sustainability efforts unabated” as long-term goals, such as the implementation of the Paris Climate Accords. All of these goals can be accomplished, and the world can prevail over this crisis, as it has over other crises, they suggest, by bonding together and coordinating responses: “As business leaders, we pledge to stand at society’s service, to help preserve and rebuild a viable society and economy, and to do all we can for our stakeholders.”
