Stakeholder

Stakeholder is widely used term in many social activities. You can not avoid it in public relations and in corporate governance defining those that have their financial stakes as stocks.

I must admit that until Nassim Nicholas Taleb book Skin in the Game (2018) I preferred to understand stakeholders as people holding stakes in their hands. Not that I would take such picture as relevant but I took it as a “entfremdung” (alienation) metal tool. When certain concepts (memes) become apparently self evident one has to alienate them for their richness to re-emerge. Again and again the truth about poetic nature of our nature comes into play. “Entfremdung” is not confined to poetry and drama (as Bertold Brecht, who made this term widely used) but should have been applied anywhere anytime.

To understand term stakeholder one has to understand the underlying memetic principle. To have a stake somewhere means to have such a bind with certain entity outside of ourselves that induces interest by default. If I have no stake somewhere I have no interest. If I have no interest I have no stake. Financial investment make such interest obvious. To be employed by a company brings necessary interest about employer. To live beside railroad or close to Airport makes me a stakeholder of that particular railroad operator or of that particular Airport. Each and every interest makes me a stakeholder of the agent that is an originator of that what I’am interested about.

Stakeholder is thus memetic entity, it defines memetic relationship of various kinds. Stakeholder denotes value transfers within meme-complexes that emerge from various relationships based on interests. explained in public relations terminology, such stakeholder relationships, if stable and widespread, become issues. Issue management is thus nothing but stakeholder relationship management.

There is one particular social activity that makes issue of stakeholders even clearer and that is market activity. I am namely stakeholder of a company that produces cars for instance only until I purchase a car. With my exchange of my money for the car, my stakeholder relationship has been consumed. After exchange of values has been consumed with the exchange of currencies, I have no longer any stake within the car producer. This expiration of my stake occurs only until my car breaks in the warranty period if warranty was not defined properly. If warranty was defined as it should be, it is another entity, insurance company most probably, that I develop a stake in. For that reason car producers and all other commercial entities try to prolong positive stakeholder relationship with their ex-customers, customers who have ceased to be their stakeholders due to purchase of their product or service.

After the book Skin in the Game was publish, I will no longer use stakes (as meat) metaphor any more. For Taleb positioned stakeholder so precisely that it needs no alienation at least for some time. Stakeholder is the one that has stake in the game. And what is even more important: it is socially wrong and destructive to bother with those that have no skin in the game. For it is always true that the one that cannot lose something, has neither skin nor interest. For that reason only those that can lose something can play decissionmakers in relation to that only that can deprive him of something only. Take one most malicious example for instance: non governmental environmental organization that is subsidised by the government has no skin in the game for its subsidies do not depend on what they really achieved in relation to environment. On the other side non governments initiative that fights against noise and pollution from nearby Airport for instance, has skin in the game for it can lose a lot. Greenpeace is not a stakeholder in relation to environment for it has no skin in the game. Contrary to popular collectivist view only entities that have interest are real stakeholders and should act as decissionmakers. It is not academia that should rule the world, but those that can really lose something.

 

Andrej Drapal