Why and how to democratise capitalism using stakeholder networks

The solution to these problems is to introduce a division of corporate power into two or more boards described as a compound board that involves the participation of stakeholders. Compound boards provide a way to integrate civil governance with corporate governance to strengthen both capitalism and democracy. The property rights of the wealthy can still be protected by one vote per share to appoint directors.

Transferring to the private sector some of the roles of civil governance also strengthens the free enterprise system as well as strengthening democracy. Democracy is also strengthened by this approach being used to reduce the size, cost and complexity of government and regulation.

On the other hand the need to increase efficiency of essential government services by capitalising them in the private sector or contracting out their services can be avoided through stakeholder mutualisation. The introduction of stakeholder network governance enriches democracy at the coalface of organisations. This provides a basis to improve efficiency, economy, effectiveness, inclusiveness, responsiveness, transparency and accountability of organisations whether they are in the public or private sector. Network governance introduces competition for corporate control within organisations to provide them sustainable competitive advantages without the need for them to become either publicly traded or privately owned.

Stakeholder governance politically legitimates capitalism by enriching participation. It allows democracy and capitalism to become mutually reinforcing instead of one gaining at the expense of the other as they do now.