Now You Can Measure Stakeholder Value

Until now, measuring how the social dimension contributes to a company’s shareholder value has been elusive. Although CEOs often refer to employees as ‘a company’s most important asset’ companies have lacked a method to include such important considerations in their balance sheet.

The method is in the report, “What is Stakeholder value? Developing a Catchphrase into a Benchmarking Tool.” In it, the authors, from the University of Leneburg and the Swiss Private Bank Pictet & Cie ( in association with the United Nations Environment Programme) propose a method to define and calculate stakeholder value, or social efficiency.

Since stakeholders (groups in the vicinity of companies) can have significant impact on a company’s valuation, the value of stakeholder relations from the company’s perspective must be known and thus assessed. The study shows how much value is created or destroyed for leading European car manufacturers for each 100 units of personnel. It reveals how efficiently automobile producers manage stakeholder relations in absolute terms and relative to the industry’s average.

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