"The Asian century" has already begun. At the dawn of the Fourth Industrial Revolution, Asia is reconnecting with the dominant position it previously held in the early 19th century, when the First Industrial Revolution was still under way. 2020 was the first time in two centuries that Asian GDP as a share of world GDP, at purchasing-power parity, was higher than that of the rest of the world.

The system that has allowed Asia's emerging economies to leap ahead can be broadly summarised as "state capitalism". This system sees the state as the principal actor over other stakeholders, which contrasts with "shareholder capitalism", a more dominant approach in the Western world. In the latter, it is the interests of shareholders that dominate over all others.

But while both economic systems have led to tremendous progress in the past few decades, neither has worked for all people and the planet. It has thus become imperative to put social, environmental, and good-governance objectives at the heart of society. Doing so is possible under a third system: stakeholder capitalism, where the interests of all stakeholders, including the environment, are taken onboard.

ASEAN's Long History of Stakeholder Capitalism

The concept of stakeholder capitalism is not new to Southeast Asia. Trading merchants in the region going as far back as the 16th century were aware of the importance of engaging multiple stakeholders. It was vital for traders to gain the trust of their buyers and surrounding local communities to be successful when travelling across different regions and interacting with diverse cultures.

This led to a focus not only on the profits of the seller, but also on the satisfaction of the buyers and contribution to surrounding communities. This was necessary to ensure long-term sustainability of their market, as traders were not able to revisit regions without the welcome of the local community. Communities then made investments in businesses to share in their successes and profits.

Fast forward to the 20th century, however, businesses in Southeast Asia started to adopt the more modern idea of shareholder capitalism in efforts to rapidly catch up with the Western world's industrial and technological progress. The emphasis on shareholder capitalism only strengthened as regional businesses were increasingly exposed to global competition.

Fortunately, we see another welcoming shift of the pendulum toward long-term, sustainable value creation with ASEAN now facing the impacts of an ongoing pandemic, globalisation, climate crisis and demographic shifts. By leveraging the region's heritage of community-first values, ASEAN businesses can help build a better regional economy that works for all.

Steps for Making Stakeholder Capitalism Work

Embracing an ethos of stakeholder capitalism, however, is not easy. The challenges often arise from the competing needs and priorities between, and sometimes within each stakeholder group. And since stakeholder groups are rarely homogenous, managing a positive outcome for all stakeholders may be easier said than done.

In the current landscape, the success of this model is still highly dependent on shareholders. If shareholders do not buy-in, it will not succeed. Therefore, it is critical for Board Members and Management to first provide a coherent strategy that is aligned to shareholders and other investors. This will help secure their buy-in on performance metrics that involve transitioning towards sustainable goals.

Creating change also requires listening to stakeholders, which is critical for building trust. Internally, listening means understanding the experiences, expectations, and concerns of employees, executives, and members of the board. The listening tour should also be complemented with data where possible, using tools like diversity metrics and satisfaction surveys.

Using the ideas generated by the listening tour, companies should then determine what kind of measurable benefit they could have, both on stakeholders as well as the company's bottom line. Serving stakeholders, if done correctly, can and should become a source of competitive advantage. The goal is to find a balance between maximising stakeholder impact and being financially sound.

Making stakeholder capitalism work, then, is a matter of striking a delicate balance among competing priorities; after all, fair is not always equal. Companies need to be ready to change their answers because the questions certainly will change. Real progress will take time; and yes, business may blunder, but that does not mean the journey is not worthwhile in the long run.

Maybank's Mission-Driven Approach

Maybank has been following and has advocated stakeholder capitalism for many years now. We have always strived to be financially inclusive and to serve as a force for good in our business model. More recently, our senior management have pledged to embed sustainability across our strategies and into our business. Thus, sustainability metrics will continue to guide and shape our way going forward.

In Singapore, Maybank has been in partnership with our customers since the outbreak of COVID-19, showing flexibility to help ease difficult situations. We have been active in providing relief packages and participating in green as well as sustainability-linked financing in the property and hospitality sectors, which is also in line with Monetary Authority of Singapore's (MAS) agenda towards a sustainable future.

Maybank also believes in growing together with the communities we operate in through initiatives such as the "Sama-sama Lokal" platform in Malaysia - a marketplace that charges zero-commission on its platform to allow local businesses to set up their stores online. It also offers third-party delivery assistance and real-time updates at zero fees.

Our approach is to leverage on the networks and core competencies to meet social needs, in a more strategic and impactful way. As a result, we have seen productivity growth and doubling of our net income over the last 10 years. This serves to highlight that focusing on long-term value creation for all stakeholders does pay-off.

We believe, as many business leaders do, that a company is more than a balance sheet. It is an expression of human bonds, a living entity that is sown and grown and whose harvest is lives and livelihoods. Leveraging on ASEAN’s rich heritage of collectivist, community-first values, regional businesses can embrace stakeholder capitalism to plant those seeds for a more inclusive and sustainable future.