Measuring the business case: linking stakeholder and shareholder value

Purpose – The purpose of this article is to provide a detailed review of how to design and test a framework for assessing the impact of corporate responsibility on firm value. Design/methodology/approach – Building on an earlier conceptual framework, this paper describes the testing of the framework on three cases within EDF over a period of some six months. The results of the workshops on the cases are then taken to show how to build on the earlier conceptual framework. Findings – Much of the difficulty of trading off corporate responsibility with financial performance is due to a lack of detailed understanding of how corporate responsibility issues can affect drivers of value. The framework was validated but to be effective it requires detailed understanding of both corporate responsibility and financial management. Research limitations/implications – The cases were undertaken within one company and so the results need to be tested in other contexts. Equally the model is too complex at this stage to be rolled out across the group. Practical implications – Nevertheless the framework is designed to be used in business and indeed EDF have taken the results into their processes. Originality/value – The paper sets out a detailed approach to linking corporate responsibility and business value in a practical way. The issue now is for businesses to find ways to apply the framework.