Stakeholder enthusiasm grips public companies and asset managers. Sustainability reports abound, reflecting an appetite for detailed data on company efforts to reduce carbon emissions and water usage and to protect and diversify workforces—while investors still seek returns to finance college tuition and fund retirement. But commentators and those who control public companies fail to engage on fundamental questions: Which stakeholders count? To what degree will companies sacrifice shareholder return to benefit those stakeholders? What happens when the interests of differing sets of non-shareholder stakeholders differ? Is all the commotion really necessary, given the many laws and regulations protecting such stakeholders? Whose priorities will, as a practical matter, govern the application of stakeholder theory, and will those in control of the priorities use this corporate theory to further their personal purposes? Exposition of these questions suggests serious changes in disclosures that director nominees and asset management firms must make, as well as the need for a hard look at whether stakeholder capitalism can be practiced with normative consistency.

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