Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors

Abstract

Purpose

This paper aims to critique moral stakeholder theory (MST) and to contrast it to earlier strategic stakeholder approach (SSA).

Design/methodology/approach

Interview data were gathered from top executives at 12 companies in the energy sector in Canada and an in‐depth literature review was conducted on MST and SSA.

Findings

“Value” for shareholder and stakeholder may not be mutually exclusive in some instances. MST may hold the key to giving the board a more useful, comprehensive framework of the firm's utility and purpose to society.

Practical implications

Organizations may be selected on their ethical performance by investors. Depending on whether ethical criteria are included in the definition of “firm's value”, decisions about which stakeholder theory to use become an issue of strategic importance to all organizations.

Originality/value

The paper illustrates how the board of directors as the governing body of the organisation may find that continuous assessment of the company's stakeholders is valuable in reducing risks.

Citation

Maharaj, R. (2008), "Critiquing and contrasting “moral” stakeholder theory and “strategic” stakeholder: implications for the board of directors", Corporate Governance, Vol. 8 No. 2, pp. 115-127. https://doi.org/10.1108/14720700810863751