Steadily rising societal expectations are pushing companies to put their stakeholders first, and shareholders second — but some shareholders are not having it. Companies that don’t comply with the stakeholder capitalism agenda are quickly sanctioned by consumer groups and the media; and CEOs who fall short can become instant pariahs. As a result, companies are quick to boast their “corporate purpose” and returns they expect from their newly designed stakeholder-centered strategies while neglecting that many shareholders still focus on firms’ near-term stock returns. When those stakeholder-centered initiatives come up short in translating into expected stock price improvements, management can lose support from shareholders on which activists are waiting to capitalize.

Managing Shareholders in the Age of Stakeholder Capitalism