By Jim VandeHei

CEO/Co-Founder of Axios; Former CEO/Co-Founder of Politico

 

The Business Roundtable today made a small, symbolic but significant move: 181 of the nation’s top CEOs agreed that driving shareholder value is no longer their sole business objective.

Why this matters: They expanded their mission beyond mere wealth creation to include everything from taking care of employees to helping their communities.

  • This shift, spearheaded by BRT Chairman and JPMorgan Chase CEO Jamie Dimon, reflects the growing pressure from employees, social media and customers to do more than increase stock prices.

The big picture … Truth is, even the most press-shy, introverted CEOs need to be de facto politicians, thanks to several unambiguous social trends:

  • Millennial employees demand their employers stand for something beyond profit.
  • It is getting harder to recruit and retain talent, especially tech talent, if profit is the only objective.
  • A rising number of consumers make purchasing decisions based on a company’s social purpose.
  • The media applies a lot more pressure on CEOs to take positions on political topics, such as race and immigration.
  • Every CEO/company is vulnerable to split-second, social media uprisings. Undefined CEOs and companies find it impossible to push back.

Watch for: Mischievous shareholders could use this BRT document, which was first reported by Fortune’s Alan Murray, to accuse CEOs of worrying about things beyond increasing the value of their shares, a fiduciary responsibility.

  • I hear several general counsels cringed — and protested — when they saw this document.

Interesting historical note: A half decade ago, Steven Pearlstein, who won a Pulitzer for his WashPost columns on the economy, partly blamed the BRT’s focus on shareholder value alone for the corruption of capitalism.

Tuck away … The BRT members that didn’t sign the new document: Alcoa, Blackstone, GE, Kaiser Permanente, NextEra, Parker Hannifin and State Farm.

Read the BRT’s full text and see the CEOs that signed on:

Statement on the Purpose of a Corporation 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. Each of our stakeholders is essential.

We commit to deliver value to all of them, for the future success of our companies, our communities and our country.

August 2019

Signed by:
Kevin J. Wheeler President & Chief Executive Officer A. O. Smith Corporation Daniel P. Amos Chairman and CEO Aflac Doug Parker Chairman & CEO American Airlines Miles D. White Chairman and Chief Executive Officer Abbott Roger K. Newport Chief Executive Officer AK Steel Corporation Nicholas K. Akins Chairman, President and CEO American Electric Power Julie Sweet Chief Executive Officer Designate Accenture Brent Saunders Chairman and CEO Allergan plc Stephen J. Squeri Chairman and CEO American Express Carlos Rodriguez President and CEO ADP John O. Larsen Chairman, President & CEO Alliant Energy James D. Taiclet Chairman, President and CEO American Tower Corporation Mike Burke Chairman and CEO AECOM Lee Styslinger, III Chairman & CEO Altec, Inc. James M. Cracchiolo Chairman and Chief Executive Officer Ameriprise Financial Andrés Gluski President and CEO The AES Corporation Jeffrey P. Bezos Founder and Chief Executive Officer Amazon Gail Koziara Boudreaux President and CEO Anthem, Inc.

 

Source: https://www.axios.com

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2 COMMENTS

  2. The people of this planet should be calling for the dissolution of these criminal organizations and the prosecution of their Satanic corporate officers for one, the other is that every government on the planet is already a corporation run by fellow Satanic corporate criminals with deep ties to the British Crown and the Vatican. We need more corporatism like we need a hole in the head. If you want to put your finger on the pulse of the criminality that has been going on for the last 150 years, checkout the 1900+ articles on www.annavonreitz.com

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