July 09, 2020 Articles

Fiduciaries and the Rise of Stakeholder Capitalism

Successful corporations serve their shareholders by serving their customers.

By Patrick McKnight

A recent announcement by the Business Roundtable sent shockwaves through the business law community. The influential group of executives explicitly endorsed the “stakeholder capitalism” model of corporate law. Stakeholder capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders. Among the key stakeholders are customers, suppliers, employees, shareholders, and local communities. By contrast, the current system of shareholder capitalism prioritizes the rights of corporate shareholders.

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