Yesterday’s post about Uber’s decision to scrap, en masse, tens of thousands of perfectly functional electric bikes due to, according to them, potential liability issues reminded me of the debate between shareholder and stakeholder responsibility of corporations.
Stakeholders are a broader set of people, which include employees, the communities in which the company’s offices operate, the environment, among others. Shareholders are therefore a subset of stakeholders.
This 2019 survey published by the Stanford Business School shows, though, that
Only 12 percent of the CEOs and CFOs of S&P 1500 companies believe that addressing stakeholder interests is a short-term cost that leads to long-term value…
Common consensus is that U.S. companies are not investing in areas like sustainability, the environment, their employee base, or communities because they do not want to incur the costs today that are necessary for long-term success in these areas. However, the companies themselves do not see it this way. Most do not believe that a tradeoff exists between short- and long-term outcomes. Instead, their viewpoints tend to fall into one of two buckets: either they believe addressing stakeholder concerns is costly to the company in the short run and will continue to be costly in the future, or they believe that addressing these concerns is immediately beneficial to the company and will remain so into the future—a so-called ‘free lunch.’”
No wonder that Uber didn’t much care for, or go the extra mile for ensuring its bikes ended up with the hands of people, neighbourhoods, communities that could have really used them.