the risks and rewards of stakeholder capitalism

dialogue project panel

This spring, The Dialogue Project, a program inside the Fuqua School of Business that explores what role business can play to help reduce polarization in our society, hosted a discussion as part of the school’s alumni reunion weekend, in which the benefits and pitfalls of companies taking a stand on social and political issues was debated. The discussion was moderated by Bob Feldman, founder of The Dialogue Project, and panelists were Gilberto Caldart (Fuqua ’02), Executive Vice Chairman, MasterCard; Kelly Marchese (Fuqua ’97), Principal, Deloitte Consulting; and Rick Larrick, the Hanes Corporation Foundation Professor and associate dean for diversity, equity and inclusion at Fuqua.

The discussion kicked off with Feldman noting that much research shows business is now the most trusted institution in America, and then asking the panelists a variety of questions related to business and social activism. Below is a snapshot of some of the questions and responses.


Q: What responsibility or opportunity does that level of trust present to businesses?

Caldart: “We are strong believers of this culture of decency and in the broad sense, not just … being focused on the bottom line, but how sustainable you are for the environment, how you’re helping the community, et cetera. As a firm or as management, if you want to succeed, you’ve got to look to the overall success of the company — the bottom line is not enough and you’re not going to build trust if you focus on one aspect of it.”

Marchese: “Twenty years ago, you couldn’t have imagined people talking about trusting the whole organization. It was really about their direct line up the chain of command. That has completely changed with the way the internet makes information about organizations completely visible. Everybody has a voice in social media. And so now organizations have to figure out a way in order to build that kind of trust in a much more macro way where they didn’t necessarily have to do it” beforehand.


Q: What kind of reaction do you get from business students when you discuss these issues?

Larrick: “If we think about the trust issue, you’re not going to elicit very much trust if you’re just expressing words but not acting on it in some way. So I think part of the class is to think about when should you be going deeper? When can you go deeper? Do you have a comparative advantage in it? And does it align with other things that are desirable for the firm?

“I think many of the students come into the class assuming that all businesses are ever doing is saying empty words. So we have to convince them that sometimes you can really point to tangible changes in behavior where the business model has changed, and the business really is making a difference for various stakeholders. And then there are other times we point to it and say, ‘You know what? Those are just empty words. And maybe that’s all they should have been doing.’ And so I think our kind of lens is to try to appeal to all students.”


Q: How does a business decide when and how to engage?

Caldart: “I don’t think there’s a one-size-fits-all answer to that. … [It starts by asking,] do we have the expertise and the credentials to … take a stand and a position? Or is this better to left to the experts? And then second, I would say, are your stakeholders, especially employees, in need or expecting you to actually position yourself … and that’s a big consideration to take. The other thing is, do we add value to the conversation or not. Will our comments add value to the conversation or actually just create more noise or eventually, worse, do harm to the company and to the brand. … it’s going through those kind of questions that you decide how and when … the issue at hand is fundamental to the values of the company.”


Q: What skills do leaders need to navigate these type of issues?

Marchese: It is really important that the people that are in leadership positions represent the [company’s] culture, not one side of it, but the entire set of values. [Otherwise], you may not recognize the blowback.”


Q: Many companies, including MasterCard and Deloitte, suspended operations in Russia following its invasion of Ukraine. What went into those decisions?

Caldart: “Our first concern was the safety of our people on the ground and their families. We have about 100 people in Ukraine, 200 people in Russia. And we did a lot of things in terms of moving the people out of Ukraine who wanted to move.”

“We [then] went through analyzing all of our regulatory commitments, the involvement of our partners and employees on the ground. Russia and Ukraine account for about six percent of our global revenue. So we looked into all of those aspects and we really thought that was the right thing to do.”


Marchese: “I think similarly the first focus of our leadership, but also all of our employees, was on how do we help with the people in in the Ukraine that were trying to evacuate, to get them stabilized in other countries.”

“Then it quickly turned to what do we do about the business in Russia? And I think the conversation about if we discontinue business was a very quick decision. But it took about a week before we officially announced it because … there’s a lot of complexity in the way we’re structured and also regulatory requirements and that sort of thing. [There was collaboration across leadership to] make sure all the right people had input on how we went about exiting.  There were 3,000 people being impacted, while not a huge part of our business, but they were part of our organization. They didn’t have a say in what the Russian government did, right? [We had to] make sure [they knew we were] not abandoning them as individuals.”

Larrick: “The striking thing that makes this different from almost anything else I can think about is the speed and unanimity of governments reacting and thereby creating this sense of, frankly, a kind of shared sacrifice that we don’t hear about very much these days. … There’s something evil here. We have to react to it and we have to do it in a unified way. So I think there are probably a few other issues that we could try to think about that way as a world, but this was at least one where people did clearly react that way.”


Q: What advice would give your 25-year-old self in terms of what you need to know to succeed in this increasingly complex world?

Caldart: ” I think [it’s important to] associate yourself with companies or ventures whose values actually connect with your values and match what you want to be like. Right? It’s not about, you know, how sexy the job is, how much money comes in, et cetera, but what is the impact you can have, … where are your values and your heart going to agree?”