Burnt at the stake

Stakeholder.
Now, there's a term you don't hear too often these days.
Not so long ago, oh say 18 months or so, it was impossible to avoid stakeholders. They were everywhere. Large government departments, local councils, charitable organisations, commercial institutions and giant industrial companies alike were stuffed to the gills with them. Rarely a week went by without some politician or CEO restating his or her total commitment to their stakeholders; be they shareholders, directors or just plain employees.

Mind, that was back then, when the world was young and bountiful, Jim; bankers were regularly lauded for their entrepreneurial skills and we spent our lives grazing on the sunlit uplands of plenty with limitless credit fuelling our consumption. You would have been hard pressed in those halcyon days to find a CEO who didn't regard his company as "A people company".

All that has changed. The economic storms swirling around the global markets apparently bore within them  gases so lethal to stakeholders that they wiped them from the face of the earth at a stroke.
How else can we explain their sudden disappearance? 
The term stakeholder has been expunged, ripped from the lexicon in case it rears up and bites its previous champions on the bum. CEOs are no longer interested in stakeholders but shareholders and shareholder value.

The problem is, of course, that the label stakeholder implies that someone is much more than just an employee, that , individually and as part of the collective, they are an essential cog in the corporate machine. Like many silly business expressions, it was devised by HR departments to give everyone a warm sense of belonging. But, it's a tough line to hold when you have to decimate a workforce and close a factory or two, when the only stake many employees would be interested in is one driven firmly into the CEO's heart.

In a recession, any stakeholders who are not actually shareholders become an embarassment, a potential drain on resources and a drag on the share price.  
That being the case, let's hope that we all learn to live with a simple truth. Companies generally, and quoted companies in particular, are not "People" companies. They are not a cross between a mutual society, a creche and a dating agency. They do not exist to provide financial support, sustenance and a really neat social life to their employees. They are money-generators, pure and simple. So, stakeholders are fine when markets are vibrant, sales are firm and the bottom line positively vibrates with health. But, they become a liability when business goes down the toilet. Then they revert to being plain employees, a Human Resource to be sure but one that, like any resource, is dispensable and replenishable.

So, no more twee expressions. Let's talk no more of Stakeholders or People Companies. When the sun comes back up again, let's close the HR department, go back to an old fashioned personnel officer, sack the consultants who specialise in devising silly expressions and give the money we save to more productive employees. Then if they really want to become stakeholders, they can buy themselves a genuine stake in the company in the form of shares.