On the surface, it was a big deal. The members of the Business Roundtable (BRT), 181 CEOs of the biggest companies in the U.S., issued a statement redefining the “purpose of a corporation.” After decades of obsession with short-term profits and investor returns, they committed to serving five stakeholders: customers, employees, suppliers, communities (including the environment), and shareholders.
Stakeholder Capitalism Still Makes Business Sense
Five years after the Business Roundtable’s call for companies to pursue more than just profit, enthusiasm has dwindled. Here’s why they should recommit.
August 21, 2024
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Summary.
Five years ago, 181 CEOs issued a new statement on the purpose of a corporation, pledging to serve five stakeholders: customers, employees, suppliers, communities, and shareholders. but even then, it lagged behind what’s needed. Their commitment mattered and drove progress. But more recently, especially in the U.S., enthusiasm for many stakeholders’ sustainability priorities — such as climate change or DEI (diversity, equity, and inclusion) — has seemingly stalled. The authors reflect on what has happened since the statement, and where we’re going. Ultimately, they argue, that given the stress on our largest natural and societal systems, we need accelerated action — deeper work to build better, more regenerative businesses — and bold, decisive leadership to ensure a sustainable and equitable future for all.