Why We Need Real Stakeholders

This is a guest article written in response to OT editor Ragnhild Freng Dale’s piece, ‘Why There Cannot Be Stakeholders in Occupy’.

I must confess to feeling ambivalent about the word ‘stakeholder’: it is in many ways redolent of the Blair years (Tony Blair spoke of creating a ‘stakeholder economy’) and all the unpleasantness that entails; since then it has become part of twenty-first century corporate speak, something that sounds vaguely hippyish, but ultimately signifies nothing. Despite my reservations, it is a concept that offers the potential for understanding many social problems; and while not offering a solution, it can provide an approach to help tackle issues of exclusion.

It is important to be sure what we mean by ‘stakeholder’. The Stakeholder forum define it as “any individual, organisation, sector or community who has a ‘stake’ in the outcome of a given decision or process”. This is broad enough to be as useful or useless as we want it to be. Ragnhild Freng Dale suggests that the concept is used to reduce “wider concerns and human beings into entities and groups that can be ‘managed’: controlled, shifted, sold or disposed of” and illustrates this with reference to a logging operation in an imaginary country ‘Dnalgne’. Tribes of hunter-gatherers in this example are reduced to ‘stakeholders’, which pays lip-service to their existence, but grants them no real say in the decision-making process. It’s a powerful argument, but is the concept of the stakeholder really to blame in this imaginary, but all-too-plausible scenario?

In truth, governments and corporations have always found it easy to ignore inconvenient groups who might be adversely affected by their decisions. They don’t need to call people ‘stakeholders’ or anything else to do this. In the scenario described the alternative to calling the indigenous people ‘stakeholders’ is simply ignoring them all-together. The problem is not that they have been called ‘stakeholders’, but rather that they have been given the title but not the recognition that the stake merits. The answer to this is not to remove the title, but to insist that the stakeholders are given the rights that should accompany their stake. To see the real implication of this, we need to consider the antithesis of the stakeholder, the ‘shareholder’.

Traditional business models recognise only two categories the shareholder and the customer. The indigenous tribes of Dnalgne are neither. Politicians modify this, recognising the voter (a type of customer) and the shareholder (the party donor). The hunter-gatherers of Dnalgne may not be able to vote and even if they do, the vagaries of most electoral systems would make the impact of their votes negligible. Similarly, they would also make unlikely party-donors. The problem with all of these categories is that they are simply inadequate.

To see this we can consider the rioting that took place in several UK cities in the summer of 2011. The causes of this rioting have been considered in depth, and with varying degrees of plausibility, elsewhere. There were two popular responses at the time. One was to suggest that rioters were simply looting goods they didn’t want to buy; the flipside of this was to suggest that our consumerist culture bombards people with images of goods that they can’t afford. The other popular reaction was simply to wonder why the rioters were destroying their own communities. Considering the second reaction highlights the inadequacy of the first.

While the ‘causes’ of the riots cannot be reduced to easy soundbites, it seems reasonable to assume that many of the rioters didn’t feel a part of the community they were destroying.  To put it another way they felt as if they had no stake. The problem with the first reaction (from whichever perspective) is that it reduces people to consumers: looters are either bad or inadequate consumers and rioting is a particularly ill-mannered form of consumption. This approach uses the perspective of consumer culture to diagnose a problem caused by consumer culture. It is difficult to see it leading to any effective solution.

Of course, labelling rioters as ‘stakeholders’ doesn’t solve the problem either. What it does do is provide a platform: if we recognise that the young, the unemployed, the marginalised – the people who can’t consume or vote, who don’t own shares or contribute to party funds – are still stakeholders, then we can work towards giving that stake its proper recognition.

In rejecting the concept of the stakeholder, Ragnhild Freng Dale describes the Occupy movement as a ‘sea of uproar’. This is a powerful and apt metaphor; it does not, however, negate the concept of the ‘stakeholder’.  The uproar is created by capitalist society’s failure to recognise the stakes held by its most vulnerable groups. While this is right and proper for now, we have to consider the future. How will we know when the Occupy movement has achieved its goals? It will be when we have a genuine stakeholder society, when the word is no longer a cheap term used by an expensive politician, but a recognition of reality; it will be when the hunter-gatherers of Dnalgne and the unemployed of Britain have a genuine stake in their societies.

By Jason Jawando