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Statement on the Purpose of a Corporation

businessroundtable.org

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Re: Statement on the Purpose of a Corporation

#21

Post by eli_gottlieb »

n-exploit wrote: post #6

If corporations want to make a real change and provide value to all stakeholders, they will need to develop a practice to systematically eliminate all negative externalities (risk) being transferred to society. Unfortunately, the current regulatory environment still makes this illegal/impossible, given that executives are still legally bound to create value for shareholders. The thoughts and feelings of these CEOs me…

If they want to make a real change, they can convert to cooperatives and commons trusts along the "Capitalism 3.0" model[1].

[1] -- http://peter-barnes.org/book/capitalism/

Re: Statement on the Purpose of a Corporation

#22

Post by ComputerGuru »

batmenace wrote: post #12
n-exploit wrote: post #6

If corporations want to make a real change and provide value to all stakeholders, they will need to develop a practice to systematically eliminate all negative externalities (risk) being transferred to society. Unfortunately, the current regulatory environment still makes this illegal/impossible, given that executives are still legally bound to create value for shareholders. The thoughts and feelings of these CEOs me…

To be fair, I still feel like it all depends on the company's definition of value. There is an interesting book on Financial Analysis by McKinsey, in which two of the firm's partners write in the foreword that the maximisation of shareholder value should always take into account long term thinking, and as such has to consider the deeper effect of a company's action. In that argument, then, a company isn't truly maxim…

Does a corporation’s own definition of value really matter if it’s publicly listed? It seems to me that if it is listed on the market then there is an implicit “exchange rate” between whatever definition the company chooses and the US dollar (or whatever currency the exchange uses), as anyone can buy into the company with the latter, regardless of how the company chooses to value itself.

Re: Statement on the Purpose of a Corporation

#23

Post by wiremine »

You can be cynical about this, and a healthy amount of skepticism is warranted given the authorship.

That said, it would be interesting (healthy?) to discuss/debate the merits of the actual statements:

* 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.

Curious where people thing they are wrong or incomplete.

Re: Statement on the Purpose of a Corporation

#24

Post by rectang »

AtlasBarfed wrote: post #13

Wake me up when I can use such a statement as a means to legally coerce corporations into compliance with existing laws, to say nothing of the exigent environmental threats facing the world. Literally every CEO would laugh at this statement in the privacy of their office, while they engineer stock manipulation to trigger their stock options and retire in 5 years. It's like an ethics in business class at MBA schools.…

"Self-regulation" like this always fails. The marketplace is unforgiving: a company which does not push externalities onto wider society will be put at a competitive disadvantage to one which does.

This statement is a bunch of malarkey designed to present the appearance of reform in order to avert the reality of reform.

Re: Statement on the Purpose of a Corporation

#25

Post by rectang »

wiremine wrote: post #23

You can be cynical about this, and a healthy amount of skepticism is warranted given the authorship. That said, it would be interesting (healthy?) to discuss/debate the merits of the actual statements: * 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 f…

> Curious where people thing they are wrong or incomplete.

Enforcement.

Re: Statement on the Purpose of a Corporation

#26

Post by tomatocracy »

wiremine wrote: post #23

You can be cynical about this, and a healthy amount of skepticism is warranted given the authorship. That said, it would be interesting (healthy?) to discuss/debate the merits of the actual statements: * 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 f…

This statement is being billed as 'demoting shareholder value' but I don't think that's what it is. These are all very good ways to deliver shareholder value, especially in mature markets. In other words it's telling you how they plan to reach that goal, not that they have suddenly changed their goals.

Re: Statement on the Purpose of a Corporation

#27

Post by mempko »

People are misunderstanding the purpose of this statement. Everyone is saying it doesn't have legal teeth. This is true. But that's not the point. The point of this statement is to signal to the public, that the wealthy are ready to give them what they want and understand that the inequality is unsustainable. They are prepared to make concessions now and it's up to the public to take them.

IMO This is basically a "Go vote for Bernie Sanders" nod from the wealthy. None of them would say this so directly, except a financier like Asher Edelman, who explained how his economic policies would lower inequality and increase the velocity of money.

Read Ray Dalio's Why and How Capitalism Needs to be Reformed https://economicprinciples.org/Why-and-How-Capitalism-Needs-...

If you want some accurate reporting, go read the financial and business press. Turns out business people kind of need to know what is going on to do their job and are willing to pay for good news reporting. So if you want 'just-the-facts' reporting, the business press is pretty good.

Re: Statement on the Purpose of a Corporation

#28

Post by dev_dull »

Corporations are just people, the same as countries are just people. To think that they operate apart from the decisions of their leaders and members is just silly. There aren’t “good” and “bad” corporations. There’s good and bad leaders and members.

I feel like there’s a strong shift happening in the US away from personal affect and responsibility and shifting it into legislative and corporate policies. The self is out of the equation.

The strongest manifestations of this (to me) are the perceived hypocrisy of proponents of this change. For example believe everyone should pay more in taxes without voluntarily paying more than the minimum themselves. Insist on inane doomsday climate predictions but also fight vehemently against nuclear power and jet travel for vacations without a care. List goes on.

Our problem as a society always seems to be those pesky other people and never ourselves.

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