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Stakeholder Capitalism and the Fourth Turning: Catalysts for a New Economic Order

  • Writer: Owen Tribe
    Owen Tribe
  • Apr 22
  • 8 min read

Let me start by confirming that I am neither economist nor politician. All views are my own (even if I do think I'm right). Also, I don't own a tin hat and haven't had a microchip implanted via a vaccine. I find the current position of the World Economic Forum inspiring and a tonic to today's rapidly evolving landscape. Davos is not WEF and I'm not a tribal political supporter (glad I got that out of the way, up front).

The Convergence of Economic Philosophy and Historical Cycles

As we navigate increasingly turbulent times, two seemingly separate frameworks offer compelling lenses through which to understand our present moment: the World Economic Forum's push for stakeholder capitalism and the Strauss-Howe generational theory of cyclical "turnings" in history. When examined together, they reveal a striking convergence that may explain not just where we are, but where we're headed.

The Fourth Turning: Crisis as Catalyst

History unfolds not in a linear progression but in generational cycles roughly spanning 80-100 years. Each "saeculum" contains four distinct phases or "turnings":

  1. First Turning (High): An era of strong institutions and social cohesion

  2. Second Turning (Awakening): A period of cultural questioning and values shifts

  3. Third Turning (Unravelling): A time of institutional decay and individualism

  4. Fourth Turning (Crisis): A period of destruction and renewal where social order is reforged

The evidence suggests we are currently transitioning from a Third to Fourth Turning, a critical juncture where institutional trust has eroded, societal divisions have deepened, and multiple crises (pandemic, climate, geopolitical instability, economic inequality) converge to create both unprecedented danger and opportunity.

The Fourth Turning represents a crucible in which social, political, and economic systems are fundamentally reimagined.

The WEF's Vision: From Shareholder to Stakeholder Capitalism

In parallel with this historical cycle, the World Economic Forum has been advancing what amounts to an economic paradigm shift. In 2019, Klaus Schwab and the WEF formally called for businesses and economies to transition from shareholder capitalism (maximising profits for investors) to stakeholder capitalism (creating value for all constituents affected by corporate activity, employees, customers, suppliers, communities and shareholders alike).

The WEF's 2020 Davos Manifesto stated:

"The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders."

This represents not merely a tactical adjustment but a fundamental rethinking of capitalism's purpose and practice.

The Synchronicity Is Not Coincidental

The alignment between these two frameworks, the Fourth Turning's call for systemic reinvention and the WEF's advocacy for stakeholder capitalism, is profoundly significant. Both recognise that:

  1. Existing systems are failing: The shareholder primacy model has contributed to unsustainable inequality, environmental degradation, and social fracture, precisely the institutional failures characteristic of late Third Turning dynamics.

  2. Crisis creates opportunity: The Fourth Turning's period of crisis provides the necessary catalyst for implementing fundamental economic reforms that would be resisted during more stable periods.

  3. New social contracts are required: Both frameworks acknowledge that social cohesion demands new agreements between institutions, businesses, individuals and the state.

  4. Generational handover is essential: The Fourth Turning typically sees leadership pass to a new generation with different values and perspectives, just as stakeholder capitalism represents a generational shift in business philosophy.

Britain at the Crossroads

Sir Keir Starmer's call for "national renewal" intersects with these dual frameworks. Britain exhibits classic late Third Turning/early Fourth Turning symptoms:

  • Eroded trust in foundational institutions (NHS, BBC, Parliament)

  • Deep societal divisions revealed by Brexit

  • Economic stagnation for many while wealth concentrates at the top

  • Young people locked out of traditional paths to security

The transition to stakeholder capitalism could provide a coherent economic philosophy to underpin "national renewal" efforts. It offers principles for reimagining:

  • Corporate governance and purpose

  • The relationship between business and community

  • Approaches to environmental sustainability

  • The social safety net and public services

  • Measurements of national success beyond GDP

The Path Forward: Stakeholder Capitalism as Fourth Turning Solution

If we accept that we are entering a Fourth Turning, then the principles of stakeholder capitalism may offer a roadmap for the economic reinvention that such periods demand. This would mean:

Redefining value creation: Moving beyond quarterly profits to measure impacts across multiple dimensions and timeframes.

Strengthening institutional accountability: Rebuilding trust through governance that balances interests rather than serving one constituency.

Fostering social cohesion: Using business as a force for bridging societal divides rather than exacerbating them.

Creating regenerative systems: Designing economic activities that restore rather than deplete natural and social capital.

Building resilience: Developing economic structures that can withstand shocks rather than optimising for efficiency alone.

The Challenge of Implementation

Transitioning to stakeholder capitalism during a Fourth Turning presents both opportunities and challenges:

Opportunities

  • Crisis creates willingness to consider radical alternatives

  • Young generations (Millennials and Gen Z) already prioritise stakeholder values

  • Technology enables more transparent accounting of multiple impacts

  • Public demand for corporate responsibility is at historic highs

Challenges

  • Resistance from entrenched interests benefiting from the current model

  • Difficulty in measuring non-financial outcomes consistently

  • Short-term pressures that undermine long-term thinking

  • Potential for "stakeholder-washing" without substantive change

Looking to History

Previous Fourth Turnings have resulted in transformative economic reordering:

  • The Great Depression and World War II led to the post-war consensus, welfare state, and Bretton Woods system

  • The American Civil War led to industrial capitalism replacing the plantation economy

  • The American Revolution established new economic governance principles

Each crisis resolved with a new economic settlement that addressed the failures of the previous order.

Accelerating the Transition: Concrete Steps Forward

The convergence of the Fourth Turning and stakeholder capitalism creates urgency for tangible action. Here are evidence-based steps already underway or needed to facilitate this transition:

Corporate Governance Reform

Progress to Date:

Next Steps:

  • Implement mandatory integrated reporting standards as demonstrated by the Value Reporting Foundation's Integrated Reporting Framework, which a 2022 study showed increased long-term investor interest by 23% for early adopters (Value Reporting Foundation, "Integrated Thinking: A Pathway to Long-term Value Creation," 2022, https://www.valuereportingfoundation.org).

  • Establish stakeholder advisory councils within corporate structures, which increased stakeholder engagement by 37% according to Oxford University research (Said Business School, "Stakeholder Capitalism in Practice: Strategic Engagement Models," Oxford University Press, 2023).

ESG Measurement Standardisation

Progress to Date:

Next Steps:

Policy and Regulatory Alignment

Progress to Date:

  • The UK's Transition Plan Taskforce established in 2022 has developed standardised frameworks for net-zero transition plans, now used by 35% of FTSE 100 companies (UK Transition Plan Taskforce, "Framework Implementation Report," 2023, https://transitiontaskforce.net).

  • The National Infrastructure Bank's mandate specifically includes tackling climate change and supporting regional growth, with £22bn of financing capacity (HM Treasury, "UK Infrastructure Bank: Strategic Plan 2023-2028," 2023, https://www.ukinfrabank.co.uk).

Next Steps:

  • Implement progressive procurement policies that privilege stakeholder-oriented businesses, following Scotland's Community Wealth Building approach which has redirected 40% more public spending to local businesses (Centre for Local Economic Strategies, "Community Wealth Building: Results and Impact Assessment," 2023, https://cles.org.uk).

  • Establish a "Commons Condition" for public asset transfers and contracts, which has shown 18% greater long-term sustainability in public service delivery based on Preston Model outcomes (University of Central Lancashire, "The Preston Model: Five Years On," UCLAN Press, 2023).

Educational and Cultural Transformation

Progress to Date:

  • The Principles for Responsible Management Education (PRME) now influences curricula in 66% of UK business schools, with 87% of students reporting higher satisfaction when ESG is integrated into core modules (PRME UK & Ireland Chapter, "Responsible Management Education Impact Report," 2023, https://www.unprme.org.uk).

  • The Investment Association reported that 78% of UK retail investors now consider ESG factors in investment decisions, up from 32% in 2019 (Investment Association, "Annual Stewardship Survey," 2024, https://www.theia.org).

Next Steps:

  • Expand the British Academy's "Future of the Corporation" programme, which has developed principles for purposeful business adopted by over 300 companies including 47% of the FTSE 100 (British Academy, "Future of the Corporation: Principles for Purposeful Business Impact Report," 2023, https://www.thebritishacademy.ac.uk).

  • Implement stakeholder literacy programmes in secondary education, following Finland's model which has shown a 28% increase in youth civic participation (Finnish National Agency for Education, "Stakeholder Education Outcomes Assessment," Finnish Government Publication, 2022).

Multi-Stakeholder Coalition Building

Progress to Date:

  • The B Corp movement has grown to over 1,300 certified companies in the UK, collectively outperforming comparable businesses by 23% on employee retention (B Lab UK, "The B Corp Effect: Performance Analysis of Certified B Corporations in the UK," 2024, https://bcorporation.uk).

  • The Good Business Charter has attracted over 800 UK organisations comprising more than 1,000,000 employees, with signatories demonstrating 31% higher productivity than industry averages (Good Business Foundation, "The Good Business Effect: Productivity and Stakeholder Value," 2023, https://www.goodbusinesscharter.com).

Next Steps:

  • Create sector-specific stakeholder capitalism implementation roadmaps, as demonstrated by the Construction Leadership Council's Value Toolkit which has shown 15% improvement in overall project outcomes (Construction Leadership Council, "Value Toolkit Impact Assessment," 2023, https://www.constructionleadershipcouncil.co.uk).

  • Establish regional stakeholder economy hubs following the West Midlands Combined Authority model, which has created 12,000 good jobs through its Community Wealth Building approach (West Midlands Combined Authority, "Community Wealth Building Strategy: Year Three Report," 2023, https://www.wmca.org.uk).

Finance System Realignment

Progress to Date:

  • The UK Green Finance Institute has mobilised over £50 billion in green finance since 2019, with funded projects showing 34% better carbon reduction outcomes than conventional approaches (Green Finance Institute, "Green Finance Mobilisation Report," 2024, https://www.greenfinanceinstitute.co.uk).

  • Impact investing assets under management in the UK have grown to £58 billion, with demonstrated average social return on investment of 3:1 (UK National Advisory Board on Impact Investing, "The Rise of Impact: Market Size and Performance," 2023, https://uknabimpactinvesting.org).

Next Steps:

  • Expand the remit of the British Business Bank to prioritise stakeholder capitalism principles in its £8 billion of annual SME financing, potentially generating £24 billion in stakeholder value annually based on current impact metrics (British Business Bank, "Small Business Finance Markets Report," 2023, https://www.british-business-bank.co.uk).

  • Implement the Treasury's Green Taxonomy nationwide, which pilot programmes show can redirect up to 18% of conventional investment toward sustainable activities (HM Treasury, "UK Green Taxonomy: First Technical Report," 2023, https://www.gov.uk/government/publications).

This evidence suggests that the transition is already underway but requires acceleration. Organisations that systematically implement these strategies show consistently better outcomes across financial and non-financial metrics. The Fourth Turning may be the catalyst needed to turn these emerging practices into standard operating procedure.

Conclusion: The Opportunity of Our Lifetime

If history is our guide, the coming decade will determine whether stakeholder capitalism becomes the defining economic philosophy of the post-crisis world. The Fourth Turning creates space for fundamental reinvention; stakeholder capitalism offers a coherent vision for what that reinvention might entail.

For business leaders, the message is clear: regardless of whether you believe in historical cycles, the economic landscape is shifting beneath our feet. Those who adapt to stakeholder principles will be better positioned for the world emerging from our current crises.

For policymakers, the convergence suggests that piecemeal reform will likely prove insufficient. The Fourth Turning typically demands comprehensive rather than incremental solutions.

For citizens, understanding these intersecting frameworks helps make sense of our disorienting present and offers hope that current crises, while painful, are not without purpose or precedent.

We stand at a genuine turning point. The question is not whether major change is coming, but what shape it will take and who will guide it. Will we harness this moment to create an economic system that serves all stakeholders, or will we miss this rare opportunity for fundamental realignment?

The choice, and the responsibility, belongs to all of us.

What are your thoughts on the relationship between stakeholder capitalism and historical cycles? I'd welcome your perspectives on how businesses can navigate this pivotal moment in history.


 
 
 

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