Toward Stakeholder Capitalism (GREs)
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Toward Stakeholder Capitalism (GREs)

December 06, 2021 | Report

What the Shift Means for Government Relations Executives

The concept of stakeholder capitalism is not new. Its origins reach back at least to the early years of the Great Depression. Where the business community is seeing change is in increased pressure for businesses to engage more publicly and act more transparently as social media platforms amplify the voices of diverse stakeholders, and investors place greater focus on stakeholder issues ranging from diversity, equity & inclusion, to sustainability, to employee well-being and workforce management, to community impact.

While many organizations have talked about the current shift toward stakeholder capitalism, The Conference Board has uniquely focused on what it means, in practice, for CEOs and the C-suite. During 2021, The Conference Board held a series of roundtable sessions with CEOs and chief financial, legal, human resources, government relations, communications, marketing, and technology officers focusing on 1) whether the shift toward stakeholder capitalism is significant and durable, and 2) what it means for their roles, the organizations they lead, and the composition and functioning of the C-suite. The discussions were held under the Chatham House Rule, with participants free to use the information received but barred from identifying speakers or their affiliation.

Here is what government relations executives told us:

What Is Changing

Government relations executives (GREs) see the shift to a stakeholder focus as durable not only because of the rise of ESG-related regulation, but also because of the growth of populist movements globally and in particular in the United States. The believe that given the complexity of many business issues involving multiple stakeholders, greater communication and collaboration across the C-suite is essential to successful execution of their expanding role. There will need to be more give and take within the C-suite to balance the needs of the overall enterprise as opposed to those of just one function.

What the Transition Means for Government Relations Executives

The consensus among roundtable participants: the variety of demands related to the shift to a stakeholder focus is becoming salient. While participants recognize the momentum behind the shift, they agree not all companies, boards, or investors are in the same place.

While GREs have always focused on stakeholders other than stockholders—regulators and public policymakers in particular—the increased focus on ESG has amplified the role’s scope.GREs are now directly and intensely engaging with local communities, business partnerships, and even employees. Therefore, “stakeholder relations” or “external relations” may be a more accurate way of describing the breadth of GREs’ responsibilities.

Expectations—and appreciation—for the GRE role have increased accordingly. As a result of their intensified engagements with regulators, communities, business partnerships, and other stakeholders, GREs are increasingly recognized for dealing with environmental and social issues “on the ground,” which has elevated the perceived importance of the role. More than before, GREs are asked for their advice, included in strategic conversations, and helping to drive the direction of the organization. They also spend more time informing business leaders internally about their ongoing work behind the scenes and, vice versa, learning about the issues that executives are encountering.

Even though the C-suite and others recognize and support the heightened relevance and breadth of the GRE role, GRE leaders sometimes don’t have an official “seat at the table.” GREs are more engaged with the C-suite than ever before. Yet, they are often not part of the C-suite, despite the growing role of government regulation (especially ESG regulation) and the growing responsibilities of the GRE. There’s an opportunity for GREs to make the case to join the C-suitenot for their own advancement, but because they represent a core stakeholder group and because there is such a high level of interaction between government and other stakeholder groups with which the company is dealing.

Seize the opportunity to nurture talent within the function. There is a generational opportunity here as the function takes on more of a public affairs perspective and seeks more diverse viewpoints. Young people are excited about addressing societal concerns and want to be involved. The shift provides opportunities for existing personnel to develop a new skill set, expand their portfolio of external relationships, elevate their internal visibility, and engage with a new set of issues. So give them the opportunity.

What the Transition Means for the Government Relations Function

The shift is forcing the GR function to move away from traditional shoe leather lobbying, toward a much broader external affairs approach. This change has a significant impact on the mindset, skills, and knowledge GR professionals need to have. Not only should they be comfortable speaking with policymakers on traditional topics, but they now also need to be able to forge meaningful partnerships with other stakeholders, including community leaders and special interest groups, whodepending on the topicmay be challenging to communicate with.

Engaging with more stakeholders on a wider variety of hot-button issues requires diversity of thought and appropriate resources. Many believe a larger external relations team is warranted. Companies must have a government relations team and structure in place that allows them to tap into a variety of perspectives to strike the right tone with their stakeholders on both sides of the political aisle. This balancing act also requires companies to use more data, including from social media and outside resources, to get a handle on public perceptions of issues, as well as to understand how stakeholders perceive the company and the way it approaches these issues.

The shift has increased internal collaboration between functions; it has especially strengthened the importance of the relationship with the legal function. GR professionals are increasingly helping their legal counterparts work through a broader set of ESG issues to consider not only the specific legal dimensions but the broader public aspects, which is something the GR function has traditionally focused on. Indeed, the GR function has always looked at what the law could be, whereas until recently lawyers only needed to focus on what the law is. In this fast-evolving regulatory environment, the combination of the two perspectives is more necessary than ever.


To understand how the shift to a stakeholder focus is affecting chief financial, human resources, legal, communications, marketing, and government relations officers—and the functions they lead—see the full series here.

Additional Resources From The Conference Board

Choosing Wisely: How Companies Can Make Decisions and a Difference on Social Issues, June 2021

Lessons from Leaders for Leaders: Organizational Impact & Social Change, May 2021

Lessons from Leaders for Leaders: Innovative People Approaches, May 2021

Brave New World: Creating Long-Term Value through Human Capital Management and Disclosure, December 2020

Insights for Investors and Companies in Addressing Today’s Social Issues, October 2020

Purpose-Driven Companies: Lessons Learned, October 2020

Sustaining Capitalism 2020 Election Series, September 2020 | CED Compendium

Organizational Characteristics of US Benefit Corporations, April 2020

Consumers' Attitudes about Sustainability – Part 2: How Sustainability Features Influence Consumers’ Choices, February 2020

Sustaining Capitalism: Bipartisan Solutions to Restore Trust & Prosperity, February 2017

Sustaining Capitalism Podcast Series, 2018–2021

CEO Perspectives, Episode 3: Multistakeholder Governance, May 2021 | Podcast

Sustainability Watch: What Can We Learn From 15 Purpose-Driven Companies?, September 2020 | Webcast



Senior Director, Content Quality
The Conference Board


President and CEO
Society for Corporate Governance
The Conference Board ESG Center

Rebecca L.Ray, PhD

Former Executive Vice President, Human Capital
The Conference Board

Dana M.Peterson

Chief Economist and Leader, Economy, Strategy & Finance Center
The Conference Board

Dr. Lori Esposito Murray

Former President
Committee for Economic Development

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