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A Stakeholder Governance Framework for Public–Private Partnerships

Africa Ariño¹; Pascual Berrone¹; Joan E. Ricart¹; Xavier Sobrepere i Profitós²; Alexis Yong³

¹ IESE Business School · ² ESCP Business School · ³ Deloitte (United States)

We advance stakeholder governance theory by theorizing how public–private partnerships (PPPs) can govern relationships with both contributing stakeholders (public and private partners) and legitimate but non-contributing stakeholders in order to create and more equitably distribute value. By integrating insights from stakeholder theory and PPP governance research, we develop a framework that distinguishes three categories of formal-relational mechanisms (i.e., participation and representation, joint integration, and monitoring and transparency). We theorize how these mechanisms mitigate three governance risks common in PPPs—cooperation failure, coordination failure, and opportunistic co-optation—that stem from goal misalignment, deficits in experience-based PPP capabilities, and power imbalances. We further argue that when risks co-occur, governance mechanisms can interact paradoxically. As a result, effective governance often requires portfolios of complementary mechanisms rather than single solutions. Our theory offers a meso-level account of how hybrid collaborations can sustain joint value creation while shaping more equitable value distribution, and contributes to both stakeholder theory and PPP governance research.

DOI

10.5465/amr.2024.0051

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