Emory Corporate Governance and Accountability Review


Peter H. Huang


Stakeholder capitalism conceives of capitalism with companies maximizing their long-term value, while considering in addition to the interests of their shareholders, also the interests of all their other stakeholders. Examples of such additional stakeholders include customers, employees, communities, creditors, competitors, society at large, and our planet. America today does not have stakeholder capitalism. Instead, America presently has shareholder capitalism, in which publicly held corporations only maximize their stock value to shareholders.

This Essay analyzes proposals for the United States Securities Exchange Commission to require that all reporting companies make periodic mandatory Environmental, Social, and Governance (ESG) disclosures of comparable, standardized, and quantifiable metrics. These required, ongoing ESG report cards would measure the diversity, sustainability, and ethical impacts of companies on other stakeholders besides shareholders. In effect, this one simple regulatory change means that reporting companies effectively will maximize shareholder value subject to ESG constraints regarding other stakeholders’ interests, just as corporations now maximize profits subject to economic, legal, market, scientific, and technological constraints.

This Essay analyzes how mandatory periodic ESG disclosures can realize diversity, sustainability, and stakeholder capitalism. This Essay explains why corporate greed as currently practiced under the notion of shareholder capitalism is a championed and cherished part of American popular culture. Finally, this Essay examines possible causes of the belief that corporate greed and individual greed are socially desirable and even somehow virtuous.