Who are the corporate stakeholders and why you should care. 

Remember when your employer told you about commitment and loyalty; that if you worked hard it would be recognized?  Recall the stories about your total compensation or why an engaged workforce was important to your organization’s success … and your future? 

It was all malarkey (to use polite terminology).

Companies also like to pontificate about their different stakeholders; employees, shareholders, customers and suppliers as if they are all equal. They are not‼️

The reality is that the only stakeholder that counts is the shareholder and the only thing that matters to shareholders is a rising stock price and dividends. They have no interest in how “good” financial results are accomplished. So when push comes to shove, those getting shoved to the side are employees, suppliers and customers, probably in that order. 

Now consider the motivation of those running a corporation. Generally speaking the majority of their total compensation takes a form directly connected to stock prices; options, restricted stock, stock-based bonuses, etc. 

Naturally when it comes to making business decisions affecting earnings and thus stock price, those decisions are made in the best interest of only one stakeholder, guess which one. Corporate CFOs are far more important than the Chief HR officer. 

With a goal to continuously improve earnings, especially in the short-run, why not take the easy route? That route is not new innovative products and services or otherwise growing revenue, but often cutting costs which of course, bumps earnings in the short-term. For workers that often means layoffs, shifting of benefit costs, terminating a pension plan, suspending a 401k contribution, etc.   Interestingly, rarely is anyone held accountable or asked why expenses grew beyond the level necessary in the first place. 

When the news comes that benefits are being adjusted, made more competitive, better aligned or any other benign phraseology that means you are screwed again, workers need to start pushing back and ask for a new definition of stakeholder, of engagement and support for the organization and why it doesn’t go both ways.