Corporate governance beyond the shareholder and stakeholder model

There is a heated debate on shareholder versus stakeholder governance. The stakeholder view recognises that companies have broader responsibilities to society than just making profit. But the lack of an integrated measure makes it difficult to hold management accountable against multiple goals. Moreover, the traditional stakeholder model tends to focus on stakeholders who are directly involved with the company, such as employees and customers, with only a minor role, if at all, for stakeholders without such a direct relation but who are affected by the company’s conduct, for example through ecological damage and climate change, including future stakeholders. This paper develops an integrated model of corporate governance including current and future stakeholders. It also presents an integrated measure for corporate value. The board can use this integrated value measure to balance the interests of the various stakeholders in a structured way. The new measure can also be used to hold the board accountable for their decisions. Finally, the paper examines the mechanisms to include the interests of the various stakeholders in the board.