Business Ethics and Corporate Governance, Second Edition

SOUND STAKEHOLDER RELATIONSHIPS ARE GOOD FOR BUSINESS

A common misconception is that achieving profits and looking after stakeholders’ interests are diametrically opposite goals. Operating fairly, responsibly, transparently and accountably towards both shareholders and other stakeholders does more than improving a company’s reputation and attract investment; it gives the corporation a competitive advantage. Firms rely on stakeholders to provide a series of essential inputs such as labour, components, spare parts and other supplies on a predictable basis. Interruptions in the supply of these goods and other services will harm the company’s ability to operate, sell its products and thus survive—let alone make profits. Hence, cultivating and maintaining ...