When the US Business Roundtable recently renounced shareholder primacy, the shift – by an organization representing companies with combined annual revenue of more than $7 trillion – prompted a wide range of reactions, from welcoming to dismissive. But the move is primarily an attempt to keep activist shareholders and populist politicians at bay.
CAMBRIDGE – Back in August, the Business Roundtable, which comprises the chief executive officers of America’s largest companies – with combined annual revenues of more than $7 trillion – updated its long-standing statement regarding corporate purpose. It’s not just about shareholders, the CEOs say; their firms must be committed to all stakeholders, including customers, employees, suppliers, communities, and the environment. In fact, shareholders came in last on the CEOs’ new list. And the statement’s principal author, in his apparent exhilaration, is reported to have said that he felt like Thomas Jefferson drafting the Declaration of Independence.
CAMBRIDGE – Back in August, the Business Roundtable, which comprises the chief executive officers of America’s largest companies – with combined annual revenues of more than $7 trillion – updated its long-standing statement regarding corporate purpose. It’s not just about shareholders, the CEOs say; their firms must be committed to all stakeholders, including customers, employees, suppliers, communities, and the environment. In fact, shareholders came in last on the CEOs’ new list. And the statement’s principal author, in his apparent exhilaration, is reported to have said that he felt like Thomas Jefferson drafting the Declaration of Independence.