Under the traditional capitalist model, financial performance for shareholders has been the primary measure of the success of a business. However, a growing awareness of ESG trends has given rise to the concept of "stakeholder value," whereby the focus is on long-term value creation for customers, employees, society and the environment rather than just short-term value for shareholders. The pandemic has sharpened this focus by highlighting the importance of metrics such as employee health and well-being, safety protocols, cybersecurity and business continuity, to name a few.

While undoubtedly beneficial in theory, the pursuit of stakeholder capitalism comes with a number of practical challenges. How do businesses measure the value created by stakeholder capitalism? How do they balance stakeholder and shareholder interests? And where does all this leave fiduciary duty?

The interests of shareholders and other stakeholders often conflict. Although it is no simple task, businesses must find a way to reconcile clashing priorities if a true stakeholder capitalism model is to be reached. Often, the answers lie in understanding the nuances between (and, sometimes, within) each stakeholder group.

Once such priorities are established, determining the framework through which the value created should be measured further complicates the issue.

The race among AstraZeneca, Moderna and Pfizer to develop a COVID-19 vaccine perfectly exemplifies the difficulty of satisfying the needs of each stakeholder group simultaneously.

AstraZeneca, for instance, prioritized wider societal needs by pricing its vaccine lower than any of the others — thereby providing the greatest long-term "value" to its recipients. The Moderna and Pfizer vaccines, however, delivered greater relative value to shareholders, by reason of the higher price.

Read the full article about stakeholder capitalism by Michael Wilkins at GreenBiz.