Stakeholder Valuing: A Process for Identifying the Interrelationships between Firm and Stakeholder Attributes

Clicks: 200
ID: 36860
2014
As firms are creating and recreating themselves as stakeholder corporations, tensions mount between a firm’s fiduciary duties to its shareholders and the broader responsibilities inherent in a stakeholder focus. Firms have employed several techniques to help resolve this tension with limited success. We suggest that the next step in reducing this tension is formally accounting for stakeholder value through changes in financial reporting. We contend that stakeholders have a financial value to the firm that can and should be accounted for through the firm’s financial reporting system. We propose a three-step process we call stakeholder valuing (SV) to begin a conversation regarding how such a method can be created. SV begins with codifying the firm’s identity as a stakeholder entity, moves to assessing stakeholder value that’s consistent with that identity, and concludes with accounting for and reporting that value. What we are suggesting will be seen by some as a radical change in accounting practices but we believe it is necessary as we move toward a consistent, reliable, verifiable, transparent, and comparable means of accounting for the true value of a stakeholder corporation.
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carlon2014stakeholderadministrative Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors Carlon, Donna M.;Downs, Alexis;
Journal administrative sciences
Year 2014
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