In the current battle against COVID-19, businesses are coming together to support governments and the community at large. The concept of “stakeholder capitalism” has never been more relevant or urgent.
Businesses have an important role to play in tackling the key global challenges our planet faces – whether it’s the coronavirus pandemic or the longer-term issues of the environment, inclusion and equality.
Stakeholder capitalism was the theme of January’s World Economic Forum Annual Meeting in Davos, where TCS and Brand Finance got together to launch the Global 500 report. Every year, it records the ups and downs of the world’s leading brands using a methodology that tracks market capitalization, profitability, turnover and reputation.
In the light of the current COVID-19 crisis, some of its findings took on added significance. How does global uncertainty impact brand value? How can companies succeed against the odds? And what makes a successful brand in these troubled times?
A key talking point from the 2020 report is the increasing importance of putting purpose alongside profit. But just how easy is that to do in the face of pressure from shareholders and investors to keep the bottom line healthy?
Benefits to all
Stakeholder capitalism is about maximizing the value of a brand, but doing so in a way that benefits all stakeholders; not just shareholders, but also employees, customers and communities.
We often think of a brand’s value in terms of how it’s perceived by the outside world. As one business leader says in the report, the point where the company delivers to its customers is “where the magic happens”. But what about how it’s seen from within? Employees are just as important, acting as ambassadors for the brand.
And what do those employees expect from the brand? A sense of purpose is key. It’s clear employees want to work somewhere that reflects their own values – and if their current workplace doesn’t do that, they vote with their feet.
Keeping it real
But it’s not just employees. All stakeholders now expect to be included as a company delivers on its purpose, and they want businesses to have open, honest conversations about the challenges they face. This authenticity is increasingly important as more and more stakeholders demand it.
The need to build brand reputation is leading many companies to rethink their purpose. Businesses are seeing how they can shift focus from financial returns to measuring their positive impact on wider society.
In this report, there are insights from the senior leaders of Ericsson, Manpower, PETRONAS, and LafargeHolcim on how they are navigating this path − and how the secrets to boosting brand value lie in balancing performance with a wider purpose.
You can download the full report here.