There is a lot of talk from the business community about need to focus on interests of other stakeholders - environmentalists, employees, local community representatives - together with the shareholders in business decisions. The layoffs during the coronavirus crisis show that the business community uses such talk only for image improvement, doing nothing of this kind in reality. The business community is right. Friedman manifesto proved that in current legal environment company's support for all the stakeholders idea is wrong. We have to change laws to make this business community talk a reality.
My idea for this goal is simple. Include all representatives of stakeholders - shareholders, environmentalists, employees, local community representatives, - into the board of every company. Give each of these four groups of stakeholders on the board the power to move 25 percent of profits to the tax collectors, if they are not happy with management decisions (in addition to the regular board member power). When there is no conflict with other stakeholders, shareholders get all the profit as a reward for well-run business. If the business is not well-run in the long term, let us remember that any business at the end belongs to the society that created the conditions for the shareholders to run this business. All stakeholders are the representatives of the society reflecting different aspects of the interests of the whole society. Half of the taxes recovered this way should be distributed to the group of stakeholders that the management made unhappy with the decisions taken, as a reward for good work in controlling the company.
In the long term particularly important is to keep the employees in control of the rule-creation at the company. If the employees are able to keep rules to the minimum, management control to the minimum, then the creativity of the employees is liberated, therefore the company has higher chances to survive a significant change in the environment.
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