Corporate critics cautiously optimistic about new CEO mission statement
BY TORY NEWMYER
with Brent D. Griffiths
Corporate chiefs are getting credit from some typically skeptical sources for their decision to abandon decades of a shareholder-first approach to running the biggest American companies.
In a new mission statement organized by the Business Roundtable, leading CEOs on Monday committed to a much wider set of goals, including investing in employees, supporting their communities, and dealing fairly with suppliers.
It marked the first time the CEO forum updated its governing principles since 1997, when it codified a singular dedication to maximizing shareholder value that has come under increasing heat amid rising inequality. And while the new statement, clocking in at a brief 300 words, leaves plenty of room for interpretation, even some harsher critics of multinational corporations’ behavior said it marked a potential sea change for American capitalism.
“It’s almost astonishing,” Robert Hockett, a professor at Cornell Law School who is advising the Democratic presidential campaigns of Sens. Bernie Sanders (Vt.) and Elizabeth Warren (Mass.), told me. “They’re in effect coming right out and saying, ‘We’ve been wrong for the last 20 years.’”
Hockett — who helped the Warren team develop her Accountable Capitalism Act, designed to push CEOs away from a focus on quarterly profits — said there is some reason to be skeptical of the new direction as corporations, increasingly treated like political punching bags, look to improve their image.
But he also thinks at least "some folks in the BRT are recognizing there’s something unsustainable about an economy that’s all about shareholder primacy. It’s a collective action problem, and unless everybody agrees, no one or two firms can profit by doing it. … So it’s probably good politics on their part in addition to good economics.”
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http://www.washingtonpost.com/news/powerpost/paloma/the-finance-202/2019/08/20/the-finance-202-corporate-critics-cautiously-optimistic-about-new-ceo-mission-statement/5d5b307d88e0fa7bb93a85a9/
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