Edward Freeman, the founder of stakeholder theory, was available for an interview in the run-up to the 8th International Conference on Sustainability & Responsibility. He discussed how stereotypes of “academics” and “practitioners” can be overcome with a view to positive social change and the importance of communication.
CBS: Mr. Freeman, you are known as the founding father of the stakeholder theory. What motivated you to postulate this theory?
Edward Freeman: My understanding of what has been done may be a bit different from others. I was simply trying to make sense of what “business” really was. I had recently gotten my PhD in Philosophy and had no experience with business, and I found myself with a Post-doc at Wharton. It seemed to me like every business I saw was trying to create value for customers, suppliers, employees, communities, and financiers. I took this as obvious and common sense, not a “theory” at all. I’ve tried to pursue this understanding of business for the last 40 years. I get way too much credit for “stakeholder theory”.
CBS: The topic of The 8th International Conference on Sustainability and Responsibility is, “Responsible Leadership in Times of Transformation”. What role does the stakeholder theory play with respect to responsible leadership?
Edward Freeman: Once again I have to confess being naieve. I didn’t know that business schools and business theorists separated “business” from “ethics” (and responsibility). I was trying to give a useful answer to the questions of (1) How can businesses thrive in times of instability and uncertainty? (2) How do we address the issue of the ethics of capitalism? and, (3) What should we be teaching in business schools? Business and responsibility have always seemed intimately connected to me. I originally thought that positivism was long dead having been killed at least by Wittgenstein and the pragmatist philosophers of the 1950s. I was surprised to find it alive and thriving (especially today) at business schools all over the world.
CBS: In your opinion, what are some of the pressing challenges facing stakeholders in times of transformation (e.g. considering digitalization or increased fragmentation of stakeholders)?
Edward Freeman: One of the biggest challenges is keeping up with some incredible technological advances, and since that is really technically impossible, it is imperative to be able to trust others. The role of ethics and integrity is more important than ever.
CBS: At the conference we aim to connect academics and practitioners. What do you think are the most significant challenges and opportunities that arise from a such format?
Edward Freeman: The biggest issue is how to really listen to each other, and establish some trust. Academics aren’t the best listeners, and practitioners don’t always have the most open minds. The challenges of communication are fairly substantial. One of the highlights of this conference in the past has been the informal time to spend with both other academics and practitioners. All seem to want to have better relationships and more communication.
CBS: How can we use this conference to create or foster societal impact?
Edward Freeman: Perhaps, out of the communication will come some new ideas, embodied in some new projects that can make a difference. Getting rid of old stereotypes about “academics” and “practitioners” can really help here.
CBS: What do you personally hope for this conference to accomplish?
Edward Freeman: Conferences can inspire people to do important work. I see that as part of my role as an academic: to inspire colleagues, students, and practitioners to figure out how to create value for their stakeholders, and make the world a better place for our children.
Thank you for your time!
About R. Edward Freeman
R. Edward Freeman is University Professor and Elis and Signe Olsson Professor of Business Administration; Senior Fellow of the Olsson Center for Applied Ethics; Academic Director of the Business Roundtable Institute for Corporate Ethics; and Co-Academic Director of the Institute for Business in Society. He is also Adjunct Professor of Stakeholder Management at the Copenhagen Business School, and Adjunct Professor at Monash University (Melbourne). Mr. Freeman taught previously at the University of Minnesota, and The Wharton School, University of Pennsylvania.
Freeman’s latest book, Business: The New Story, with Bidhan Parmar and Kirsten Martin will be published by Columbia University Press in 2019, A previous book, Stakeholder Theory: The State of the Art, was published by Cambridge University Press in 2010 (co-authored with J. Harrison, A. Wicks, B.Parmar, and S. de Colle.) He is the author or editor of over twenty volumes and one hundred articles in the areas of stakeholder management, business strategy and business ethics. Freeman is perhaps best known for his award winning book: Strategic Management: A Stakeholder Approach, published in 1984.
Freeman has a Ph.D. in Philosophy from Washington University, and a B.A. in Mathematics and Philosophy from Duke University. He was recently awarded four honorary doctorates in economics and management (DHC) from Comillas University in Madrid, from Radboud University in Nijmegen, the Hanken School of Economics in Helsinki and Sherbrooke University in Canada for his work on stakeholder theory and business ethics. Mr. Freeman is a lifelong student of philosophy, martial arts, and the blues. He is a co-principal in Red Goat Records, LLC found at redgoatrecords.com. For more information, go to www.REdwardfreeman.com
More interviews with CSR experts on the CSR conference blog at: www.international-csr.org/blog/