The Global Challenge of Balancing Stakeholder Needs in Business
By: David J. Ferran, CEO of Torrey Project
Stakeholders and US Business
All companies have multiple stakeholders. That is a matter of fact. Some companies truly care about, and work to serve, all of their stakeholders in a reasonably balanced manner. Others tend to focus more narrowly on the needs and desires of only one or perhaps a select few of their stakeholders.
For the past 50 years, we in the USA have been predominantly focused on serving our shareholders and the majority of U.S. publicly traded companies have shown relatively little interest in the needs of other stakeholders such as our employees, customers, suppliers, the environment, and society. This Wall Street driven approach has recently come under intense scrutiny in America and we can now happily report that there seems to be a growing sense of awareness that changes need to be made to America’s existing approach to business.
Stakeholders and Japanese Business
In December of 2019, I had an opportunity to visit Japan, where I met with some of the most renowned and respected thought leaders in the field of Japanese Entrepreneurship. I was joined by Torrey Project’s Board Chair, Yumiko Damashek who, over the past 25 years, has been a shining example of a female Japanese executive who was able to break the glass ceiling in the largely male dominated Japanese corporate world.
During our time in Tokyo, we were honored to meet with Hiroshi Komiyama who was the 28th President of The University of Tokyo and is now both the President of the Platinum Society Network and the Chairman of Mitsubishi Research Institute. Komiyama sensei is also the author of a recently released book entitled New Vision 2050 - A Platinum Society.
In our discussions we aligned on the view that corporate Japan is now feeling the negative consequences of Japan’s historical imbalance in its Stakeholder focus. However, the imbalance in the Japanese corporate world has, for years, been quite a bit different than that of Corporate America. In Japan, the problem has not been too much focus on shareholders, as it is in America. Rather, there has perhaps been too little attention paid to the needs of corporate shareholders in Japan, with a much greater focus on meeting the needs of customers and providing a lifetime security net for employees.
Balancing Stakeholders Globally
This fascinating discussion truly opened my eyes, not only to the global nature of the need to better balance the needs of all stakeholders, but also to the fact the in different parts of the world, the issues are different and the required actions will be unique. Reasonable balance, over the longer term, seems to be the key ingredient in all cases, but the path to achieving the optimum balance in caring for stakeholders will likely look different in different societies and in various business cultures.