The Business Roundtable caused a stir last month by declaring the purpose of a corporation isn’t merely to generate returns for shareholders -- the group’s official line since 1997 -- but to care for all its stakeholders.
The 300-word statement spurred speculation over how corporate America might change. Not much, apparently, if you listen to the chief executives themselves.
Bloomberg News reached out to the 181 CEOs who signed the declaration. Roughly two dozen responded, with identical answers: Our companies are already run with customers, employees, suppliers and communities in mind. And shareholders, of course. Otherwise we’d have gone out of business long ago.
Many even said they’ve operated that way for years, or even decades -- in other words, long before disillusionment with the global economy helped upend politics from Washington to London and beyond. And they rejected the notion that earning shareholders a fair return ends up short-changing other parties.
Critics, though, point to gaping inequality, runaway executive pay and insufficient efforts to combat climate change as evidence that while some companies do better than others, the overall numbers can’t possibly bear out the CEOs’ claims.
“I don’t know how you look at the current situation in the country and say: ‘We’re really killing it in terms of taking care of all our stakeholders,’” said Rick Wartzman, director of the Drucker Institute’s KH Moon Center for a Functioning Society, who discussed the matter with Roundtable Chairman Jamie Dimon over dinner last year. “There’s been a tremendous imbalance with shareholder value being put ahead of everyone else.”
Several CEOs acknowledged that many Americans haven’t reaped the benefits of recent years’ economic expansion, and that the political discourse has made them think harder about what can be done to bring those people along. But some, including JPMorgan Chase & Co.’s Dimon, argue that corporations alone can’t solve all society’s problems and shouldn’t be blamed for its shortcomings.
“I do think business can do more,” Dimon said. “But I don’t think business alone can do it.”
In interviews, the men -- and they were all men -- spoke about a range of programs and initiatives undertaken to pay employees more, reduce their firms’ environmental footprint and support communities.
“Most corporate CEOs feel that we serve each stakeholder best by serving all,” said Tom Linebarger, head of diesel-engine manufacturer Cummins Inc. and a Roundtable board member.