Employee rights

Edward Freeman defended stakeholder theory as juxtaposed to the shareholder theory of corporate
governance. In particular, he argued that ethics could and should not be separated from economics
(the ‘separation-thesis’), so that the interests of stakeholders were inseparable from the interest of the
‘corporation’. Thus, stakeholder theory argues that taking the interests of stakeholders into
consideration is also viable business. However, considering the basic interests of employees, and the
current resurgence of debates on workplace democracy and meaningful work, there is reason to
explore whether stakeholder theory (pace Freeman) will be able to accommodate employees’, as
stakeholders’, interests. Indeed, whether employees can, and should, be conceptualized as
stakeholders at all.
In this entry the status of employees in stakeholder theory, and in particular workers’ status, is
reviewed and critically evaluated against the backdrop of current theory of workplace democracy and
meaningful work.
Stakeholder theory appears to be accommodating employees interests and in favor of granting a
democratic say in the decision-making process. Stakeholder theory is resembling workplace
democracy as it democratizes the corporation by letting relevant stakeholders count in the governance
of the corporation. However, stakeholder theory is not envisioning a stakeholder democracy of the
corporation, rather it settles with stakeholder capitalism.