The traditional model of capitalism, focused primarily on shareholder returns, faces increasing scrutiny.  Stakeholder capitalism, a concept gaining traction, emphasises the importance of considering all stakeholders – employees, customers, communities, and the environment – alongside shareholders.  Interestingly, a long-standing practice, the apprenticeship system, offers valuable insights for corporations seeking to implement stakeholder capitalism effectively

The apprenticeship system serves as a powerful example.  For centuries, the system has fostered a thriving business ecosystem based on reciprocity and shared success.  Wealthy merchants take on apprentices, providing them with not just skills but also capital and mentorship.  Over time, these apprentices establish their businesses, often becoming mentors themselves.  This cyclical model prioritises community well-being alongside financial gain, embodying the core principles of stakeholder capitalism.

Corporations can glean several key lessons from the apprenticeship system. At the center of the system is investing in People. The system prioritises human capital development.  Mentors dedicate time and resources to training apprentices, ensuring a skilled workforce, and fostering long-term loyalty.  Corporations can emulate this by investing in employee training and development programs, creating a culture of learning and growth.  This not only benefits employees but also improves company performance through a more skilled and engaged workforce.

The system does not only prioritize human capital development, it fosters a long-term view of business success.  Mentors understand that their success is intertwined with the success of their apprentices. Corporations can adopt this perspective by focusing on sustainable practices and social responsibility. Prioritising environmental well-being and ethical sourcing not only benefits society but also mitigates future risks to ensure a long-term business plan

It also encourages knowledge-sharing and collaboration. The apprenticeship thrives on knowledge transfer and collaboration.  Mentors generously share their expertise with apprentices, creating a network of mutual support.  Corporations can foster a similar spirit by encouraging knowledge sharing between departments and with external partners.  This collaborative approach can lead to innovation and problem-solving, benefiting all stakeholders.

Furthermore, the system operates on the principle of shared success.  Mentors benefit from the skills and contributions of their apprentices, while apprentices gain invaluable experience and eventually become independent business owners.  Corporations can translate this into a focus on creating a win-win scenario for all stakeholders.  Fair wages, safe working conditions, and community engagement contribute to a more loyal customer base and a positive public image.

The system fosters strong relationships. Apprenticeships are built on close-knit relationships between mentors and apprentices. Similarly, corporations should prioritise building strong relationships with all stakeholders, including employees, customers, suppliers, and communities. This approach promotes trust, transparency, and collaboration, which are critical for long-term success.

Apprenticeship creates a sense of community. It often takes place within a community context, where participants engage with local cultures and traditions. Corporations can learn from this by engaging with local communities, supporting local initiatives, and promoting corporate social responsibility. By doing so, they can strengthen their social license to operate and foster goodwill.

While the apprenticeship system offers valuable lessons, implementing these principles in a modern corporate setting presents challenges.

The prominent among these challenges is scalability. The close, personal relationships at the heart of the apprenticeship system may not be easily replicated in large corporations.  Developing scalable mentorship programs and fostering a sense of community within a large organisation requires careful design and implementation. However, some organisation or individuals have scaled their mentorship initiatives successfully impacting many not only in their community but across the border to continent-wide initiatives.

Defining and developing metrics and measurements is also another challenge.  Stakeholder capitalism requires measuring success beyond just shareholder returns.  Developing comprehensive metrics that track social and environmental impact alongside financial performance is crucial.  However, defining and measuring these metrics can be complex, time and resources consuming. Many corporations would rather opt for alternative initiatives for the optics and brand visibility.

It can also affect the corporate culture. Shifting from a shareholder-centric mindset to a stakeholder-centric one requires a cultural change within corporations.  This involves aligning leadership practices, employee incentives, and decision-making processes with stakeholder values. This will lead to a change in brand identity necessitating rebranding.

Despite these challenges, corporations can leverage the apprenticeship system's core principles to build a more sustainable and successful future. They can do so by developing apprenticeship programs. Modern corporations can adopt the apprenticeship model by creating structured programs that combine on-the-job training with mentorship.  These programs can benefit not only new hires but also existing employees seeking to develop new skills.

They can also invest in community engagement initiatives.  Corporations can actively engage with their local communities through partnerships with schools, non-profit organisations, and community development initiatives.  This fosters a sense of shared responsibility and strengthens the social fabric.

This can also be done by adopting sustainable practices throughout their operations and supply chains. Corporations demonstrate a commitment to environmental well-being and fair labour standards.  This will align their interests with those of environmentally and socially conscious consumers. This should be done with open communication with all stakeholders to build trust and ensure alignment with stakeholder capitalism principles.  Corporations should regularly report on their social and environmental impact alongside financial performance.

The apprenticeship system serves as a powerful reminder that long-term success is contingent on considering the interests of all stakeholders.  By adopting the core principles of knowledge sharing, collaboration, and shared success, corporations can build stronger relationships with employees, customers, and communities, creating a more sustainable and equitable future for all.  As the world grapples with complex challenges, stakeholder capitalism, informed by the wisdom of traditional practices like the apprenticeship system, offers a promising path forward.

Research & Advocacy Department,

Chartered Institute of Directors (CIoD), Nigeria
28, Cameron Road, Ikoyi, Lagos.