Clare Curran

Stakeholder capitalism—the idea that business should serve all stakeholders, not just shareholders—led the agenda at last month’s World Economic Forum meeting in Davos, Switzerland.[1] In a panel discussion on the topic, Marc Benioff, CEO of Salesforce, declared, “Capitalism as we know it is dead. . . . Stakeholder capitalism is finally hitting a tipping point.”[2] Indeed, on January 17, Airbnb, a tech unicorn expected to go public later this year, announced updates to its corporate governance—in the name of benefiting all stakeholders.[3]

Last August, the Business Roundtable famously released an updated statement on corporate purpose, which eschewed conventional principles of shareholder primacy and redefined the purpose of a corporation to deliver value to all stakeholders—customers, employees, suppliers, communities, and finally shareholders.[4] The Council of Institutional Investors (CII) denounced the Roundtable’s statement, claiming that “[a]ccountability to everyone means accountability to no one.”[5]

The CII’s response reflects a key criticism of stakeholder capitalism: its sanction of multiple, potentially conflicting, objectives without uniform metrics for gauging performance leaves corporate leadership unfocused and unaccountable.[6] Shareholder primacy, by contrast, instructs corporations to maximize shareholder wealth and measures performance using stock price.[7] Unless companies take concrete action and identify specific, quantifiable metrics to hold themselves accountable, critics argue, the Roundtable’s statement and similar rhetorical commitments to stakeholders are meaningless.[8] Even advocates like Benioff acknowledge the need to measure “stakeholder return.”[9]

Airbnb’s recent announcement is a striking step forward to address these concerns.[10] After outlining principles for serving each stakeholder group—guests, hosts, communities, shareholders, and employees—Airbnb provided a range of updates to its corporate governance practices, announcing:

  1. Sample metrics for tracking progress and ensuring accountability (e.g., survey data evaluating hosts’ satisfaction with the company’s service and policies)
  2. Its plan to establish a board-level Stakeholder Committee, responsible for advising the board on the company’s multi-stakeholder approach
  3. Its creation of a dedicated stakeholder team headed by a member of executive leadership
  4. Its decision to link stakeholder principles and metrics to employee compensation
  5. Its plan to host a Stakeholder Day to report on progress and engage with stakeholders[11]

Each of these updates represents a concrete—and concerted—effort to hold the company accountable to its avowed stakeholder purpose. Airbnb CEO Brian Chesky recognized as much, explaining, “I don’t want to be one of those CEOs to say we’re trying to do all this great stuff, but then we treat board meetings exactly like every other board meeting.”[12]

Airbnb’s decision to tie employee compensation to progress on stakeholder goals like guest safety is a particularly significant move—and a marked departure from peer compensation schemes based entirely on stock price.[13] Airbnb itself explained that the governance changes are meant to ensure that the stakeholder goals and metrics actually inform decisions made by the company and its employees.[14] Accordingly, the new compensation structure will set incentives in a way that potentially conflicts with the short-term profit maximization Wall Street has come to expect.[15]

With an expected 2020 IPO and valuation of over $30 billion,[16] Airbnb can serve as a test case for stakeholder capitalism and Wall Street’s receptiveness to this revisionist strain of corporate purpose. Traditional investors may be loath to provide capital to a company explicitly balancing profit with other stakeholder interests. On the other hand, Airbnb’s governance changes may help garner goodwill in the investor community—particularly among environmental, social, and governance (ESG) investors—and show that the company is sensitive to current trends. Indeed, several of the largest index fund managers, including BlackRock, State Street, and Vanguard, have signaled an appetite for the long-term focus of stakeholder corporate governance.[17]

What happens between now and Airbnb’s offering will be telling. Airbnb’s January 17 announcement acknowledged the company was “nowhere near finished” in its work towards serving all stakeholders.[18] The company shared only sample metrics, and it remains unclear the extent to which progress on stakeholder goals will impact executive pay.[19] To stave off criticism and show it is serious about its commitment, Airbnb should tie a significant portion of executive—not merely employee—compensation to specific stakeholder metrics. Take for reference Danone, a public company with B Corp ambitions: approximately 35% of CEO Emmanuel Faber’s 2018 bonus derived from performance towards the company’s ESG targets.[20] The portion of pay tied to stakeholder goals must be meaningful enough to actually incentivize change.

Airbnb has an opportunity to become the poster child for stakeholder capitalism. While investors with little tolerance for deviation from shareholder primacy are now less likely to purchase shares in Airbnb, investors favoring stakeholder capitalism may now see Airbnb as a proof of concept. Airbnb should take advantage of the enthusiasm surrounding stakeholder corporate governance and flesh out its plans while it retains the flexibility of a private company. A successful IPO may then be the final sign that stakeholder capitalism has arrived.



[1] The theme for this year’s January 21-24 meeting was “Stakeholders for a Cohesive and Sustainable World.” Oliver Cann, Davos 2020: World Economic Forum Announces The Theme, World Econ. F. (Oct. 17, 2019),

[2] Davos 2020 Liveblog, Stakeholder Capitalism: What is Required from Corporate Leadership?, World Econ. F.  (Jan. 21, 2020),

[3] John D. Stoll, Airbnb’s New Compensation Plan Asks Shareholders to Share With Other Stakeholders, Wall St. J. (Jan. 18, 2020),

[4] Business Roundtable Redefines the Purpose of a Corporation to Promote “An Economy That Serves All Americans,” Bus. Roundtable (Aug. 19, 2019),; Statement on the Purpose of a Corporation, Bus. Roundtable (Aug. 19, 2019),

[5] Council of Institutional Investors Responds to Business Roundtable Statement on Corporate Purpose, Council Institutional Inv. (Aug. 19, 2019), The Council of Institutional Investors is an association of pension funds, other employee benefit funds, endowments, and foundations, with combined assets of about $4 trillion. Id.

[6] See, e.g., Addisu Lashitew, Stakeholder Capitalism Arrives at Davos, Brookings (Jan. 21, 2020),

[7] Lynn A. Stout, The Problem of Corporate Purpose 1-4 (Brookings 2012),

[8] See, e.g., John D. Stoll, A Reminder for CEOs Considering a Shift in Focus: Shareholders Are Still King, Wall St. J. (Sept. 6, 2019),; Nell Minnow, Six Reasons We Don’t Trust the New “Stakeholder” Promise from the Business Roundtable, Harv. L. Sch. F. on Corp. Governance (Sept. 2, 2019),

[9] Marc Benioff, Opinion, Marc Benioff: We Need a New Capitalism, N.Y. Times (Oct. 14, 2019),; see also, Brian T. Moynihan, Businesses Can Be Profitable and Drive Progress on Societal Priorities, World Econ. F. (Jan. 14, 2020), (“One challenge for corporations and investors is that there are many competing standards, metrics and measurements and no well-established or generally accepted framework for assessing long-term viability as defined through the prism of societal value.”).

[10] Airbnb CEO Brian Chesky is not a member of the Business Roundtable (and therefore not a signatory to the new statement on purpose), but Airbnb made a similar commitment in 2018 when it publicly declared that the company would aspire to benefit all stakeholders over the long term. An Update on Our Work to Serve All Stakeholders, Airbnb (Jan. 17, 2020),

[11] Id.

[12] DealBook, Airbnb Imagines a “Stakeholder” World, N.Y. Times (Jan. 17, 2020),

[13] Stoll, supra note 8.

[14] Airbnb, supra note 10.

[15] See Stoll, supra note 3.

[16] Stoll, supra note 3.

[17] Martin Lipton, It’s Time to Adopt the New Paradigm, Harv. L. Sch. F. on Corp. Governance (Feb. 11, 2019),

[18] Airbnb, supra note 10.

[19] Id.

[20] 2019 Compensation for the Chairman and Chief Executive Officer, Danone (Feb. 22, 2019), Twenty-five percent of the CEO’s 2018 bonus compensation was based on Danone’s progress on “social and societal” indicators, including employee engagement and climate commitments. Another ten percent drew from progress towards Danone’s “2030 objectives,” which include B Corp certification efforts. Id.