Statement on the Purpose of a Corporation
businessroundtable.org
Statement on the Purpose of a Corporation
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Re: Statement on the Purpose of a Corporation
#2Are they trying to get ahead of government regulation with this? It looks like a declaration of self-regulation to me.
If they really intend to switch gears and prioritize other stakeholders, that may require some enforceable agreements among them to prevent competition from causing a race to the bottom, and I wonder if such agreements would be legal.
Re: Statement on the Purpose of a Corporation
#3I find the prospect of this translating into actual action is dubious.
Re: Statement on the Purpose of a Corporation
#4Are they trying to get ahead of government regulation with this? It looks like a declaration of self-regulation to me. If they really intend to switch gears and prioritize other stakeholders, that may require some enforceable agreements among them to prevent competition from causing a race to the bottom, and I wonder if such agreements would be legal.
Companies can work together on a wide range of issues. It’s mostly product prices they need to compete on. Industry groups are surprisingly common consider MPAA, “got milk” etc.
Re: Statement on the Purpose of a Corporation
#5Are they trying to get ahead of government regulation with this? It looks like a declaration of self-regulation to me. If they really intend to switch gears and prioritize other stakeholders, that may require some enforceable agreements among them to prevent competition from causing a race to the bottom, and I wonder if such agreements would be legal.
>Are they trying to get ahead of government regulation with this? It looks like a declaration of self-regulation to me.
I think it's more a bit like the Henry Ford deal where he insisted on paying his workers enough to actually be able to afford the cars. Anemic demand is one of those things that can get an economy stuck in a low-growth poverty trap.
Either that or they're trying to get ahead of the guillotines.
Re: Statement on the Purpose of a Corporation
#6If 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 mean nothing unless it's predicated/followed by regulatory change.
Re: Statement on the Purpose of a Corporation
#7Anything that is as subjective as this cannot be enforced, and the CEOs will have a cop-out stating that they focussed on "other outcomes" and declare victory.
Re: Statement on the Purpose of a Corporation
#8Are they trying to get ahead of government regulation with this? It looks like a declaration of self-regulation to me. If they really intend to switch gears and prioritize other stakeholders, that may require some enforceable agreements among them to prevent competition from causing a race to the bottom, and I wonder if such agreements would be legal.
>Are they trying to get ahead of government regulation with this? It looks like a declaration of self-regulation to me. I think it's more a bit like the Henry Ford deal where he insisted on paying his workers enough to actually be able to afford the cars. Anemic demand is one of those things that can get an economy stuck in a low-growth poverty trap. Either that or they're trying to get ahead of the guillotines.
My impression is the last sentence - self preservation. With the threat of automation, they can see the pressure mounting on finding solutions that do not result in unions or pitchforks.
Re: Statement on the Purpose of a Corporation
#9i stopped reading at "all americans"
Re: Statement on the Purpose of a Corporation
#10> Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance. Each version of the document issued since 1997 has endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With today’s announcement, the new Statement supersedes previous statements and outlines a modern standard for corporate responsibility.
At first glance, this seems like a terrific move. In recent decades, this trend of shareholder primacy has been more than evident. CEOs are expected to lead their companies to more and more performance quarter by quarter, rather than focusing on the long-term prospect -- sometimes even at the cost of it.
Let's hope that this "shareholders first, at all costs" mantra finally dies. There's more than one dimension to success, especially future success.