Rethinking Business to Serve Human Rights

In most countries, the dominant corporate norm concentrates power in the hands of shareholders as opposed to other types of stakeholders. This means that a small number of individuals and institutional investors exert disproportionate control over our economies, and our working lives. This model is increasingly questioned in a context of employee disengagement, trust erosion at work and weakened social cohesion. To address these challenges, a team of HEC Paris researchers Marieke Huysentruyt, Anna Kovacs, Aline Gatignon, Julia Emtseva, Daniel Martinez, Rodolphe Durand propose policy measures to broaden stakeholder governance. This policy proposal is part of the Roadmap for eradicating poverty beyond growth, initiated by former UN Special

Rapporteur on extreme poverty and human rights Olivier De Schutter to advocate for a transition to a human rights economy. The researchers suggest broader stakeholder governance, i.e. giving employees, communities and others a say in how organizations are run. Central to this approach is redefining corporate purpose so that it reflects local priorities, and embedding this purpose within legal frameworks. Governments can encourage this shift by subsidizing the short-term costs of stakeholder engagement. By creating concrete channels for employees to influence decisions that affect their everyday work, these measures are expected to increase long-term organizational survival and performance, while accelerating the transition to a fairer, more sustainable, and more democratic society. 

An economic model has reached the end of the road, as a group of leading economists wrote in a widely circulated The Guardian opinion piece that calls for political leaders to use their Roadmap for eradicating poverty beyond growth. This model is that of economic growth, which has failed to bring shared prosperity and instead concentrated wealth in very few hands. The Roadmap initiated by Olivier De Schutter offers a range of alternatives to move beyond this growth-oriented approach, and this policy profile by HEC researchers is one of its contributions, focusing on stakeholder governance. Indeed, one of the central tenets of the current dominant model is “shareholder primacy,” whereby equity holders (in traditional companies) hold substantially more governance rights than other stakeholders, notably employees. 

This is a global problem, not only because the limited influence of workers over their working lives leads to disengagement along with its economic consequences, but also because this dissatisfaction is associated with adverse consequences on health and well-being, trust and social cohesion at work and society at large. How can we foster greater worker (organizational) democracy and just production systems? 

The researchers’ policy proposal rests on two interrelated pillars. First, it puts forward a set of measures for companies to broaden stakeholder governance, focusing on the involvement of employees. Second, it outlines policy instruments through which governments can incentivize companies to act and strengthen stakeholder accountability. 

Actions available to companies

Actions for companies as firm-level actors

• Revisit corporate purpose
  Companies should clarify their “reason for being” -- the moral foundation of their economic activities, beyond financial performance. The process matters as much as the statement itself. This corporate purpose should be built with meaningful input from employees, communities and other local stakeholders.
• Broaden corporate governance
  Articulating purpose is just the first step; it must inform practices. This requires incorporating a wide range of stakeholders, not just equity holders, into governance structures. For instance, employee representation at board level enables workers to shape decision-making without undermining performance. To be effective and not just symbolic, the formal changes must be supported by cultural change. 
• Increase worker autonomy
  Giving employees more discretion over their work helps foster meaning and fulfillment, and can support long-term productivity gains. 

Actions for companies as part of an ecosystem

There is only so much companies can achieve in isolation. They are participants in broader networks of change that include communities, NGOs, social movements and public institutions. 

• Ground change in local knowledge
  Drawing lessons from international development (which also pursues social goals but whose initiatives have not been without tensions, trade-offs, and unintended effects of top-down solutions), firms should anchor action in local knowledge, leaning on local actors.
• Enter partnerships
  To address complex social challenges, companies should partner with other organizations, including non-profits, to leverage capabilities and create innovative solutions. A key aspect of any fruitful stakeholder relationship is the set of principles guiding it, or “stakeholder architecture.” Successful models balance internal coordination with external partnerships either following a “potluck” model, with a group of external partners pooling resources, or a “community kitchen” model, building upon strong ties with a wider range of stakeholders. 
  To successfully overcome complex global challenges, one type of partnership is particularly relevant: public-private partnerships (PPPs).
• Encourage corporate volunteering
  Corporate volunteering, pro bono work and participation in social initiatives can help embed purpose inside the organization. These initiatives, if truly valued by employers, can strengthen employee engagement, social connections, skills development and talent retention. 

Actions available to governments

Expanding stakeholder governance may entail short-term costs, as coordination becomes more complex and value is redistributed toward a broader set of stakeholders. Governments can play a critical role in subsidizing the initial investments (in governance structures, etc.), and may reap the long-term social benefits associated with more inclusive, resilient, and democratic forms of corporate governance. Subsidizing transition costs can help overcome potential reluctance on the part of equity holders to embark on this new course.

The regulatory environment can also accelerate this shift with the creation and promotion of alternative legal frameworks. Examples include France's société à mission, the UK's community interest company, Italy's società benefit, and benefit corporations in the US. 

Another approach can be support for the cooperative sector, as cooperatives play an especially valuable role in the provision of social services. Last but not least, regulators can also mandate greater transparency on the part of firms, requiring them to disclose their corporate purpose and the practices through which their commitments to stakeholder engagement are operationalized. 

Implementation across time

Short-term actions (2 to 3 years) 

• Launch a nation-wide campaign to promote corporate purpose and stakeholder governance.
• Create an earmarked fund to absorb initial investment costs.
• List existing best practices. 
• Adapt the legislative/regulatory environments to help expand the cooperative sector and support mission-oriented enterprises, for instance by facilitating access to finance.

Medium-term actions (5 years)

• Establish financing mechanisms to support enterprises achieving social performance targets. 
• Support territorial economic and social policies that leverage the contributions of purpose-driven enterprises.
• Promote training programs focusing on skills that enable participation (e.g. intercultural fluency).

Long-term actions (10+ years)

• Align economic policies (including trade and labor policies) with the principles of purpose-driven businesses.
• Include these businesses in national budgeting.
• Establish an institutionalized platform for cross-sector collaboration.

Implementation across governance levels

The measures outlined above, from awareness campaigns to funding and collaboration platforms as well as repositories of best practices, need to be adapted for each level: local, national, regional and global.

Implementation across economic contexts

In low-income countries, the priority should be to support formal work structures. Middle-income countries would benefit from learning expeditions. In high-income countries, considering regulation with extraterritorial reach would enable more effective coordination and level the playing field. 

Several examples of organizational initiatives demonstrate that it is possible to broaden stakeholder governance and enjoy the benefits across the board. 

John Lewis Partnership: employees as owners

John Lewis Partnership, owner of the John Lewis and Waitrose stores, is the UK's largest employee-owned business, with some 65,000 “partners” (as its employee-owners are called). The firm is governed along democratic principles, with three governing authorities jointly responsible for the health of the partnership. As of the 2025/26 financial year, the nearly one-century-old business showed improved year-on-year sales and profit margins, enabling the distribution of a 2% bonus for all partners. 

Natura: creating value with the community

The Brazilian beauty company Natura, operating in the challenging environment of an emerging market, addressed some difficulties by taking on institutional and relational investments. For instance, it built cross-sector partnerships with grassroots NGOs and other local organizations for decisions about compensation paid to suppliers in the Amazon.  While these investments came at a cost, the long-term benefits supported performance and helped the company grow into a successful conglomerate. 

This policy proposal encourages a shift towards stakeholder governance, through mission-oriented and purpose-driven enterprises. Governments can create and promote the necessary legal frameworks, and offer financial support, to accelerate this shift. This policy is directly aligned with international commitments to human rights (right to work, to an adequate standard of living, etc.). As a contribution to the Roadmap for eradicating poverty beyond growth, this proposal outlines steps towards a more just production system.

Based on “Policy Profile 1.18: Supporting Purpose-Driven and Mission-Oriented Enterprises.ˮ In The Roadmap for Eradicating Poverty Beyond Growth: Report of the Special Rapporteur on extreme poverty and human rights, Olivier De Schutter. New Economies Eradicating Poverty, 2026. Marieke Huysentruyt, Aline Gatignon, Julia Emtseva, Daniel Martinez and Rodolphe Durand are all Professors at HEC Paris; Anna Kovacs is a pre-doctoral researcher at HEC Paris.