Hardly a day goes by without news of another activist investor demanding action to maximize profits and increase shareholder returns. This intense focus on maximizing profits for the benefit of shareholders shows little regard for the people in the organization, the quality of the products and services offered, the customers and suppliers within the supply chain, or the environment in which the organization operates. Paying attention to multiple stakeholders is not a priority for the activist investor who is interested only in financial returns.
Yet the shareholder versus stakeholder debate presents a false dichotomy according to Conscious Capitalism cofounder Raj Sisodia and his fellow researchers, who reported on this issue in the book, Firms of Endearment. They believe that the best way to create value for shareholders in the long run is by consciously creating value for all stakeholders. Taking this to the next level, one of the six conscious business principles described in the book, The Inner Journey to Conscious Leadership is Stakeholder integration: honoring the interrelationship, interconnectedness, and interdependence of all major stakeholders.
The actions of activist investors hitting the business news pages almost daily is disturbing. Their actions, focused solely on financial performance, dampen my optimism that the growing number of customers, employees, suppliers, and other stakeholders striving for a more conscious business philosophy can withhold the onslaught of the activist investor. The need to stand up for the ideals and philosophies of conscious business is greater than ever. Leaders of conscious businesses are typically emotionally and spiritually mature, serving a higher purpose and focusing on multiple stakeholders, mastering ego, treating everyone with respect, and acting ethically for the good of all. We need leaders who aspire to be leading consciously for the benefit of all stakeholders.