When the U.S. Business Roundtable announced that it was redefining the purpose of a corporation to accommodate a broader group of stakeholders – extending beyond shareholders to include employees, customers, suppliers and communities – the stock market didn’t seem to react. I saw no thick reports from market strategists detailing how these new principles would affect company earnings or stock prices, whereas reports on trade, interest rates, and consumer spending continuously streamed across my screen.
How Investors Have Reacted to the Business Roundtable Statement
A survey shows mixed results.
November 20, 2019
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Summary.
What are shareholders thinking about the Business Roundtable’s new direction to accommodate a broader group of stakeholders beyond just shareholders? What about the professional investors who manage their assets? On the shareholder side, the direction the Roundtable is taking appears to reflect a strong move toward environmental, social and governance principles, commonly referred to as ESG. As for the professional investors, several leading firms have begun to offer products that allow shareholders to invest exclusively in companies that are certified as following socially responsible guidelines. But smaller competitors have a way to go in terms of socially responsible investing.