BEYOND SHAREHOLDERS

CORPORATE RESPONSIBILITY (WSJ)

Shareholders are important for corporations, as their capital funds operations. But, corporate leaders need to also consider impacts on consumers, who provide revenues, and employees, who perform operations. Over focuses in one area can be detrimental in other areas, which harm corporate outcomes.

For instance, many companies provide great return on investments, but struggle to maintain market share and customer bases when markets change. The organization may be efficiently run, but may lack needed investments in product pipelines to compete with substitutes.

If workers are not kept happy, customer experiences are impacted as well as quality in production. The best investment a company can make is in human capital, providing fair and competitive compensation as well as professional development programs. Satisfied workers are more productive and can be relied on for greater quality output than low skilled labor miles away from customer markets.

Companies focusing on stakeholders not just the shareholder should not be shocking. Companies that care for the employees, protect consumers, and lift communities will be able to provide more stable long term returns.