Is Corporate America Upgrading its Responsibility?
Late August, a full two page ad was taken out by the Business Roundtable. 181 prominent CEOs drew a new line in the sand. Since 1997 their purpose of a corporation stated that “corporations exist to principally serve their shareholders.” Now they are acknowledging this is out of date, irrelevant, not true, or all of the above.
For a free market economy to serve all Americans, they have refined their statement of purpose.
Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.
While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:
- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
In short, the purpose of a corporation is to provide something of real value to customers, employees, suppliers, local communities, and stockholders.
The commitments of these 181 are recorded, but not every member of the Business Roundtable signed on.
How will this play out?
The companies and leaders who chose not to sign include: Wells Fargo & Co., Kaiser Permanente led by Bernard J. Tyson, Blackstone Group Inc. led by Stephen A. Schwarzman, General Electric Co. led by Larry Culp, Conduent Inc., Parker Hannifin Corp. led by Thomas L. Williams, State Farm led by Michael l. Tipsord and Alcoa Corp. led by Roy Harvey.