Clarkson 7 Principles

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Definition: Clarkson 7 Principles

The following 7 principles are the ‘Clarkson Principles’, which are used in the corporate world for stakeholder management.  They represent an early stage of general awareness of corporate governance. These principles are:

  • Managers acknowledging and actively monitoring the concerns of all legitimate stakeholders, and taking their interests appropriately into account in decision-making and operations;
  • Managers  listening to and openly communicating with stakeholders about their respective concerns and contributions, and about the risks that they assume because of their involvement with the corporation;
  • Managers  adopting processes and modes of behaviour that are sensitive to the concerns and capabilities of each stakeholder constituency;
  • Managers  recognising the interdependence of efforts and rewards among stakeholders, and attempting to achieve a far distribution of the benefits and burdens of EMB activities among them, taking into account their respective risks and vulnerabilities;
  • Managers  working cooperatively with other entities, both public and private, to ensure that risks and harms arising from the corporation’s activities are minimized and, where they cannot be avoided, appropriately compensated
  • Managers  avoiding activities that might jeopardize inalienable human rights (such as the right to vote) or give rise to risks which, if clearly understood, would be patently unacceptable to relevant stakeholders
  • Managers  acknowledging the potential conflict among members and staff between a) their own role as corporate stakeholders, and b) their legal and moral responsibilities for the interests of all stakeholders, and addressing such conflicts through open communication, appropriate reporting, incentive systems and, where necessary, third-party review.

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