Robert Strand, Executive Director of the Center for Responsible Business, gave Congressional testimony this month on the benefits of stakeholder capitalism, or the view that the purpose of a firm is to provide value to its stakeholders—including employees—rather than putting shareholders above all else.
“The 21st century will be defined by whether American capitalism sufficiently meets our collective needs and tackles our greatest challenges including climate change, growing inequalities, decent work for all, and threats to our democratic institutions,” Strand said.
Strand testified before the U.S. House Committee on Small Business at a hearing entitled “Embracing Corporate Social Responsibility: Small Business Practices” on Dec. 4. (His testimony begins at minute 17:00.)
Strand also spoke of the promise of B Corps (Benefit Corporations) such as Patagonia, and discussed the corporate governance structures embraced by the Nordic countries of Denmark, Finland, Sweden, Iceland, and Norway, where the stakeholder view of the firm originated.
“I am deeply concerned about mounting populist attacks on the concept capitalism,” Strand said. “But I am equally concerned
about inaction on the part of our business and political leaders to go about the pragmatic work of improving
our version of American capitalism so it best meets our needs and tackles our greatest challenges.”