Stakeholder governance

What is stakeholder governance?

Stakeholder governance is a corporate governance model that requires a company’s leadership to consider how their decisions impact stakeholders — like employees and customers — alongside their shareholders. 

Companies built on stakeholder governance measure success not just by how much profit they make, but by the value they create for workers, communities, and the planet, and work towards an economy that recognizes that all these things are interdependent. 

This is the founding principle of B Lab. We’re shifting the structure of capitalism away from shareholder-focused models built on “profit at all costs” to a system that asks businesses to be accountable to people and the planet.

From shareholder primacy to stakeholder governance: how did we get here?

When B Lab was founded in 2006, the business world was based on one certainty: companies existed to make money for the people who owned them. Everything else — the well-being of workers, the fate of communities, the state of the planet — was someone else’s concern. This is the core idea behind shareholder primacy. 

For 20 years, B Lab and the B Corp movement have been proving that a different way of doing business is not only possible, it’s essential. In a world facing accelerating climate change, widening social and economic inequality, rapid technological change, and rising expectations from workers and customers, “profit only” is no longer a viable way to run a business.

Read more about our achievements to date in our 20th Anniversary Impact Report.