Does nationalization increase stakeholder democracy?

Purpose - The purpose of this paper is to investigate the theory and practice of stakeholder democracy. After examining the liberal notion of representative democracy, the paper seeks to identify the democratic deficit associated with the shareholder and stakeholder approaches to corporate governance. Investigating stakeholder democracy in nationalized industries in both market‐ and state‐capitalist societies, the argument presented is that neither type of society has significantly increased stakeholder involvement in decision making. Design/methodology/approach - The paper uses a Hegelian dialectical approach to stakeholder democracy; relying on such modes of analysis as identifying internal contradictions. Findings - The paper concludes that stakeholder democracy is both real and nominal in the political sphere, but restricted and contested in the private and public sectors in the economic sphere. Practical implications - The paper calls for the setting‐up of democratic structures to oversee the production and distribution of the goods and services necessary for human wellbeing. Originality/value - The paper investigates the relatively neglected topic of stakeholder democracy, using a Hegelian dialectical methodology. In the context of the 2007/2008 financial crisis and its recessionary aftermath, the paper calls for a radical re‐evaluation of corporate governance.