Forum: Companies need to look after stakeholders, not just shareholders

The restructuring of Singapore Press Holdings' media business highlights the issue with a publicly listed newspaper company that has to answer to shareholders (Move lets SPH maximise returns, says chairman, May 7).

This preoccupation with shareholder returns embodies American economist Milton Friedman's doctrine that the only responsibility of business is to increase profits.

The merits of Friedman's premise have been dissected, debated and in turn dismissed by a growing number of academics and business leaders who are making the case for stakeholder capitalism - the need for business to serve not only shareholders but also employees, suppliers, customers and the wider community.

This call for a more inclusive model of business had begun before the Covid-19 pandemic, with frameworks like the Triple Bottom Line (which says companies should also focus on people and the planet besides profits), platforms like eco-businesses and developments like the B-Corp movement championing a more purpose-driven model of capitalism that considers its impacts on workers, communities and the environment.

Covid-19 has further exposed major fault lines in society, underscored the gravity of biodiversity loss and laid bare systemic inequalities.

There is also widespread consensus that a return to "business as usual" must be avoided.

Government and business leaders have advanced that Covid-19 gives us an unprecedented opportunity to reset the economy and build back better - for present and future generations.

This includes a focus on climate action, addressing systemic inequality and building more ethical and resilient supply chains.

SPH has played a significant role in Singapore's history and development.

The leadership understands the mutual dependence between business and society.

As the planned restructured SPH embarks on a new chapter, it has a unique opportunity to use its not inconsiderable influence to advocate and champion a more responsible capitalism - a model that values human, social and natural capital alongside financial capital - and deliver a shared and durable prosperity not only for shareholders but all stakeholders.

Caroline Seow