Stakeholder Capitalism: Implications for Exit Planning
The Pennsylvania Bar News recently featured an article by XPX Philadelphia Member Sean-Tamba Matthew that explained an emerging shift in the understanding of a business’ role in our economy and how this influences exit planning:
In 2019, the Business Roundtable’s Statement on the Purpose of a Corporation shifted away from its shareholder primacy orientation for a corporation to an approach that considered the effects of a corporation’s actions on all “stakeholders.” The 2019 statement provided that “[w]hile each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders… Each of our stakeholders is essential.” Furthermore, the statement provided that companies must be committed to delivering value to customers, investing in employees, dealing fairly and ethically with their suppliers, supporting the communities in which they operate and generating long-term value for shareholders.
This program kicks off a two-part discussion about shifts in business and economics, and how this affects our clients. In this Part I of the discussion, we’ll discuss stakeholder capitalism including:
- What it is
- What it means
- Why this is a viable option for some of your clients
- Ways of implementing it for lower-middle market companies
In Part II of the discussion, we’ll discuss how these shifts have lead to the rise of intangibles as a driver of corporate value.
Stevens & Lee
Sean Tamba-Matthew is a shareholder of Stevens & Lee and also works with its affiliated business, SES ESOP Strategies. He advises companies, business owners, boards of directors and employee stock ownership plan (ESOP) trustees on transactional, corporate governance and formation matters related to the design and implementation of ESOPs.
Sean is also an Adjunct Professor at Temple University’s Beasley School of Law where he co-teaches a Stakeholder Capitalism course. In addition, he’s a member of the leadership council for the Business Law Section of the PA Bar Association and an advisory board member of Talley Management Group, an employee-owned company.
Program produced by XPX Philadelphia.