They see the handwriting on the wall, and worried about a Warren presidency.
Group of top CEOs says maximizing shareholder profits no longer can be the primary goal of corporations
August 19 at 11:09 AM
The organization representing the nation’s most powerful chief executives is rewriting how it views the purpose of a corporation, updating its decades-old endorsement of the theory that shareholders’ interests should come above all else.
The new statement, released Monday by the Business Roundtable, suggests balancing the needs of a company’s various constituencies and comes at a time of widening income inequality, rising expectations from the public for corporate behavior and proposals from Democratic lawmakers that aim to revamp or even restructure American capitalism.
“Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity,” reads the statement from the organization, which is chaired by JPMorgan Chase CEO Jamie Dimon.
The group says its members “share a fundamental commitment to all of our stakeholders,” and commit to doing well by their customers, employees, suppliers and local communities. “Each of our stakeholders is essential,” the group adds. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
The new statement includes 181 signatures of the 192 current members of the Business Roundtable, which represents many of the biggest companies in the United States. While the statement represents at the very least a symbolic change in the group’s thinking, it was not clear how companies would change their practices in light of the new commitments, nor how any changes in behavior would be assessed or monitored.
Some companies that did not sign were not eligible to do so because an interim chief executive is in place or the company is transitioning between leaders. There were seven other CEOs who did not sign for various reasons: Roy Harvey at Alcoa, Stephen Schwarzman at Blackstone, Larry Culp at General Electric, Bernard Tyson at Kaiser Permanente, James Robo at NextEra Energy, Thomas Williams at Parker Hannifin and Michael Tipsord at State Farm. A Business Roundtable spokesperson noted that a non-signature does not necessarily mean the CEO does not support the statement.
The statement comes amid a growing national debate about the responsibilities of corporations as a time of stark economic inequality. A range of lawmakers have been trying to force companies to consider society’s larger goals when they do business or be penalized. Democratic presidential candidate Sen. Elizabeth Warren (Mass.) has proposed a plan that would require U.S. corporations to turn over part of their board of directors to members chosen by employees. Vermont Sen. Bernie Sanders, another 2020 hopeful, would prohibit corporations from buying back their own stock — a move that drives up share prices — unless they offer a certain level of pay and benefits for workers.
Other efforts include bills to penalize companies for data breaches or improve the diversity of corporate boards.
more:
http://www.washingtonpost.com/business/2019/08/19/lobbying-group-powerful-ceos-is-rethinking-how-it-defines-corporations-purpose/?wpisrc=nl_most&wpmm=1
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