The seven principles of Stakeholder Management were developed out of four conferences hosted by the Clarkson Center for Business Ethics & Board Effectiveness between 1993 and 1998.
Management scholars shared ideas on stakeholder theory and produced the principles which are intended as guidelines for how managers should manage their stakeholders (Caux Round Table, 2002).
These seven principles are named after Max Clarkson (1922 – 1998) a prominent researcher on Stakeholder Management.
The Clarkson Principles of Stakeholder Management
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 all stakeholders, and should address such conflicts through open communication, appropriate reporting and incentive systems and, where necessary, third party review.
Bucholtz and Carroll point out that the principles highlight action words that illustrate the spirit that should be used in engaging with stakeholders:
- acknowledge conflicts
Clarkson Principles of Stakeholder Management, references and further readingCaux Round Table Moral Capitalism at Work, 2002. The Clarkson Principles of Stakeholder Management www.cauxroundtable.org/index.cfm?menuid=61 accessed 16 March 2017.
Bucholtz, A. K. and Carroll, A. B. 2012. Business and Society , Ethics and Stakeholder Management. 8th edition. South-Western. Cengage Learning. Latest edition