The History of Stakeholder Capitalism

While the term “stakeholder” has existed for a few hundred years, one of the first appearances of the term in business literature was in 1963 in an internal memo at the Stanford Research Institute. [i] The stakeholder-centric approach took off in 1984 when Dr. R. Edward Freeman, a professor at the University of Virginia Darden School of Business, published a seminal book focused on stakeholder theory, “Strategic Management: A Stakeholder Approach.” Founded on pragmatic and libertarian theoretical lines, stakeholder theory[ii] was created after current business theories did not respond well to rapid changes and other evolutions occurring in the business environment. Since then, Dr. Freeman has authored or edited more than 100 volumes and 200 articles in stakeholder management, strategy, and ethics. Nearly all scholarly articles about stakeholder theory or stakeholder capitalism track back to Freeman.

What is a Stakeholder-centric Approach?