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Principles of Stakeholder Management

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The Clarkson Principles

Summary of the Principles of Stakeholder Management by Clarkson. Abstract

Max Clarkson (1922-1998)

Professor, University of Toronto

Founder of the Centre for Corporate Social Performance and Ethics in the Faculty of Management

These Principles of Stakeholder Management originate from four conferences that were hosted by the Centre for Corporate Social Performance and Ethics in the Faculty of Management [now called: the Clarkson Centre for Business Ethics & Board Effectiveness or CC(BE)] between 1993 and 1998. 

In these conferences, management students gathered to share ideas on stakeholder theory, a then emerging field of study examining the relationships and responsibilities of a corporation to employees, customers, suppliers, society, and the environment.

Clarkson's principles represent an early stage general awareness of corporate governance concerns that have been widely discussed in connection with the business scandals of 2001-2003.

Principle 1

Managers should acknowledge and actively monitor the concerns of all legitimate stakeholders, and should take their interests appropriately into account in decision-making and operations.

Principle 2

Managers should listen to and openly communicate with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation.

Principle 3

Managers should adopt processes and modes of behavior that are sensitive to the concerns and capabilities of each stakeholder constituency.

Principle 4

Managers should recognize the interdependence of efforts and rewards among stakeholders, and should attempt to achieve a fair distribution of the benefits and burdens of corporate activity among them, taking into account their respective risks and vulnerabilities.

Principle 5

Managers should work cooperatively with other entities, both public and private, to insure that risks and harms arising from corporate activities are minimized and, where they cannot be avoided, appropriately compensated.

Principle 6

Managers should avoid altogether activities that might jeopardize inalienable human rights (e.g., the right to life) or give rise to risks which, if clearly understood, would be patently unacceptable to relevant stakeholders.

Principle 7

Managers should acknowledge the potential conflicts between (a) their own role as corporate stakeholders, and (b) their legal and moral responsibilities for the interests of stakeholders, and should address such conflicts through open communication, appropriate reporting and incentive systems and, where necessary, third party review.

These principles should be regarded as “meta-principles”, encouraging and requiring management to develop more specific stakeholder principles and then to implement those in accordance with the Principles.

Book: Jeffrey L. Seglin - The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business

Book: Joseph W. Weiss - Business Ethics: A Stakeholder and Issues Management Approach

Book: O. C. Ferrell - Business Ethics: Ethical Decision Making and Cases

👀TIP: On this website you can find much more about corporate ethics and the Clarkson Principles!

Compare with the Clarkson Principles: The Shareholder and Stakeholder Perspective  |  What is Shareholder Value?  |  What is Value Based Management?  |  Why Value Based Management?  |  Intrinsic Stakeholder Commitment  |  Strategic Stakeholder Management  |  Strategic Intent

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