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Clarkson’s Principles

Clarkson Principles are the rules about Stakeholder management. These principles were given by Max Clarkson (1922-1998), a faculty member at University of Toronto. He retired in 1988. After his retirement he founded Clarkson Centre for Business Ethics & Board Effectiveness, or CC (BE) 2. It was initially known as “Centre for Corporate Social Performance and Ethics” in the Faculty of Management. The Clarkson Principles of Stakeholder Management are a result of the four conferences hosted by the centre between 1993 and 1998. These principles are mainly addressed to managers.[ad#ad-4]

The seven Clarkson Principles are:

1. The activities of all the legitimate stakeholders should be acknowledged and actively monitored by the managers. The managers should also show interest in decision making and operations.

2. There should be an open communication between managers and stakeholders about their respective concerns and contributions, and the risks that may arise because of their involvement with the corporation.

3. The processes and even the modes of action are sensitive to the concerns as well as the capabilities of each stakeholder citizenry; it should be adopted by the manager.

4. There is an interdependence of efforts and rewards among stakeholders.

5. Managers should work in cooperation with other entities to minimize the risks and harms arising from corporate activities and where they cannot be avoided, appropriately compensate for them…

6. Managers should avoid activities that would cause harm to human rights or give rise to risks which would be unacceptable to relevant stakeholders.

7. Lastly, all managers play a role of corporate stakeholders as well as hold legal and moral responsibilities for the interests of stakeholders. They should acknowledge the potential conflicts between the two. Such conflicts should be addressed through open communication, proper reporting and incentive systems and, if needed, then a third party review.

Written by: Matt

We also suggest this relevant article if you have time: Situational Leadership by Kenneth Blanchard and Paul Hersey

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