Why we won’t use the word “stakeholder” and what we use instead.
One billion. That’s how many hits the word “stakeholder” gets on Google. We’d say that officially makes it a buzzword—ubiquitous for sure, perhaps even entering the realm of jargon. And fair enough, with the rise of ESG, conversations about “stakeholders” are certainly becoming more and more common.
CORe recognizes that your business does not exist in a vacuum. It celebrates all of the people who interact with your business because, together, they make it successful.
According to The Encyclopedia Britannica, the modern definition of stakeholder is anyone who either impacts or is impacted by the decisions made by a business. This impact could be financial, moral, legal or societal. Some stakeholders are within your company (employees), others do business with you (suppliers and customers) and some you will never exchange money with (the greater community), but they will be affected all the same. If your company has a “stakeholder perspective”, you consider everyone who could be affected in your decision making.
It makes sense to have a word for this. A couple of syllables that say: “A business affects a lot of people. We should know who these people are and how to interact with them for the betterment of our company.”
Semantics aside, having a ‘stakeholder perspective’ is actually a good thing. It helps you build networks, make your business more resilient, robust and future proof. And, perhaps the most compelling reason—especially if you do business with publicly traded companies—ESG requires it.
But we don’t think that word should be ‘stakeholders’.
I know, I know. I can hear you right now: “So, if ‘stakeholder’ is common usage and having a ‘stakeholder perspective’ is good for business, what’s the problem? What’s all the fuss about?”
Well two things, really. The first has to do with colonialism rearing its ugly head. Again. Back in the day, the word stakeholder was used, well, literally. Anyone wanting a piece of the ‘new’ land, whether it be gold miners, farmers, loggers or railroad builders would claim, or hold, the plot by driving stakes in the ground. The government would then give these stakeholders exclusive rights to the land. The problem is that the land wasn’t new and it certainly wasn’t theirs to claim, as it was already inhabited by the indigenous people of that country.
Stake-holding marked more than just the corners of a plot of land. It was the beginning of a long, dark and unjust time in our history, where colonial interests were put above the rights of the indigenous people. A time that has yet to be fully rectified.
‘Stakeholder’ then evolved to refer to anyone who invested money into something—back in the day this meant a card game, a piece of land or a slave. All of the stakeholders had some skin in the game, but the one with the most invested held all the cards, while others lost their shirts (or quite literally their lives).
The second reason is that ‘stakeholders’ in the modern sense of the word—those who impact or are impacted by a company’s decisions—is not appropriate to describe this complex inter-relationship. The relationship between the parties involved with a company goes could go beyond who impacts whom–it could speak to co-creating a more livable, just world.
Now you may be saying to yourself: “Whoa! It’s just a word for pity sake!” And to that we say: “Words are powerful.” As Smith College professor Elizabeth Pryor notes: “Language is at its best when it brings many people into communication with each other.” We totally agree–and we’d like to add: without discrimination or prejudice.
We thought long and hard about a suitable alternative to ‘stakeholders’. We wanted a word that went beyond ‘groups who impact or are impacted by a business’. Beyond obligation, duty and competition. We wanted a word that shows what 21st Century business is capable of: being responsible to and for each other and working together for the greater good.
Enter: Circle of Responsibility (CORe)
What is CORe?
Your CORe is your Circle of Responsibility. It embraces all of those to whom you owe your business’ success—employees, customers, clients, suppliers and contractors. All those who keep you on your toes—government regulators, competition, investors and shareholders. And everyone who depends on your company to do the right thing—the community it operates in, the greater society and, of course, the non-humans we share this planet with.
Who is your CORe?
It is your employees, board members, management, leadership, suppliers, customers, clients, investors/ shareholders, community members, government officials—your supply chain plus all of the people you employ. It is also the people who have direct contact with your company: your suppliers, contractors, investors and shareholders, suppliers, customers and clients. And it includes those who may be at arm’s length, but are affected by decisions you make, nonetheless.
Why CORe?
CORe recognizes that your business does not exist in a vacuum. It celebrates all of the people who interact with your business because, together, they make it successful.
CORe is about a change in perspective:
- Altering relationships—asking how you can help each other, instead of what obligation or sacrifice do you have to make.
- Focusing on systems and connections instead of individual agendas.
- Considering how those who are indirectly affected by your decisions–such as the greater community– may be impacted.
We know the shift from stakeholder to CORe won’t happen overnight. Change is slow. It requires some mind shifting, some forethought, and some educating. But ultimately this change will move us in the right direction–towards a better way of doing business.
Who are “We”?
We are EarthWork Collective. We are co-creating a world where people, the planet and organisations can thrive. This requires working together for the greater good. And we’re pretty good at that. Get in touch!
References
Delaney, R. (2021). Words are important, they can wound or they can heal. In
Rayback, M. (2019). It’s time to stop calling them stakeholders. In Medium. Retrieved on August 8, 2022 from https://medium.com/the-dark-glass/its-time-to-stop-calling-them-stakeholders