ABSTRACT
This chapter analyses how capitalism should be reformed so that it served the whole of mankind and not simply the capitalists. It considers the question of how to achieve a change in the behaviour of firms so that they are managed in accordance with the stakeholder theory, in the context of the problem of excessive management remuneration. The chapter concludes that accountancy can make a significant contribution to making firms more accountable to stakeholders. It proposes that a reformed capitalism should provide that business firms be managed with a view to the welfare of all persons who are affected by the firm's activities and not just that of the capitalists who own the firm. The relationship between the firm and these stakeholders is essentially one of mutually beneficial exchange. The stakeholders of a firm may be divided into two groups: primary stakeholders and secondary stakeholders.
