OT: The CEOs of nearly 200 companies just said shareholder value is no longer th
Papi_Chulo
Miami, FL (or the nearest big-booty club)
Shareholder value is no longer the main focus of some of America’s top business leaders.
The Business Roundtable, a group of chief executive officers from major U.S. corporations, issued a statement Monday with a new definition of the “purpose of a corporation.”
The reimagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits. Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement.
“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” said the statement signed by 181 CEOs. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
The conscience of Wall Street has been at the forefront of American business and politics recently as issues about economic equality and fair business practices dominate the 2020 election stage and the overall news cycle.
The Business Roundtable, founded in 1972, has put out many statements on the principles of corporate governance since the late 1970s. It said this new definition “supersedes” past statements and outlines a “modern standard for corporate responsibility.”
“The American dream is alive, but fraying,” Jamie Dimon, chairman and CEO of J.P. Morgan Chase and chairman of Business Roundtable, said in a press release.
Along with Dimon, the statement received signatures from chiefs including Amazon’s Jeff Bezos, Apple’s Tim Cook, Bank of America’s Brian Moynihan, Dennis A. Muilenburg of Boeing and GM’s Mary Barra.
“Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,” said Dimon.
Another one of the signatures is from BlackRock chief Larry Fink, who has previously called on CEOs to reevaluate the purpose of a corporation, specifically the “inextricable link” between purpose and profit.
“Purpose is not the sole pursuit of profits but the animating force for achieving them,” Fink wrote in his 2019 annual letter to shareholders. “As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity.”
Fink said that fundamental economic changes and the failure of the U.S. government to provide lasting solutions has forced society to look to companies for guidance on social and economic issues, such as environmental safety and gender and racial equality.
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.
https://www.cnbc.com/2019/08/19/the-ceos…
The Business Roundtable, a group of chief executive officers from major U.S. corporations, issued a statement Monday with a new definition of the “purpose of a corporation.”
The reimagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits. Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement.
“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” said the statement signed by 181 CEOs. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
The conscience of Wall Street has been at the forefront of American business and politics recently as issues about economic equality and fair business practices dominate the 2020 election stage and the overall news cycle.
The Business Roundtable, founded in 1972, has put out many statements on the principles of corporate governance since the late 1970s. It said this new definition “supersedes” past statements and outlines a “modern standard for corporate responsibility.”
“The American dream is alive, but fraying,” Jamie Dimon, chairman and CEO of J.P. Morgan Chase and chairman of Business Roundtable, said in a press release.
Along with Dimon, the statement received signatures from chiefs including Amazon’s Jeff Bezos, Apple’s Tim Cook, Bank of America’s Brian Moynihan, Dennis A. Muilenburg of Boeing and GM’s Mary Barra.
“Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,” said Dimon.
Another one of the signatures is from BlackRock chief Larry Fink, who has previously called on CEOs to reevaluate the purpose of a corporation, specifically the “inextricable link” between purpose and profit.
“Purpose is not the sole pursuit of profits but the animating force for achieving them,” Fink wrote in his 2019 annual letter to shareholders. “As divisions continue to deepen, companies must demonstrate their commitment to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity.”
Fink said that fundamental economic changes and the failure of the U.S. government to provide lasting solutions has forced society to look to companies for guidance on social and economic issues, such as environmental safety and gender and racial equality.
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.
https://www.cnbc.com/2019/08/19/the-ceos…
Got something to say?
Start your own discussion
15 comments
But when I saw the statement "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."
I agree with that statement but makes me think big-business is trying to get ahead of this current socialist-style movement being touted by many on the left.
Looks like the stock-market has just about made up everything it lost last week
Addendum- with today's low unemployment rate, it follows that companies will focus more on employee retention, and raising compensation/benefit levels to attract and retain employees. Contrast that with the lost decade (post 911, Great Recession) where one was considered lucky just to have a job, and had fewer options to move to another company. Thus companies could get away with reduced compensation levels, and stingy raises.
_______
Ditto. We just had a massive corporate tax cut that went primarily into stock buybacks (not business investment or rising wages) which raises CEO compensation. Most likely these CEOs fear a progressive backlash in 2020.
____
That "chunk" is about 1/3 of Americans. The stock buybacks help CEOs the most because they are compensated with company stock. Obviously I own stocks like everyone else on TUSCL.
Think how patently absurd this article is: the only major piece of legislation under Trump was the corporate tax cut which was predicted to raise the debt and deficit significantly($2T over 10 yrs). Companies used the tax cut to buy back their own stock instead letting the money "trickle down" into business investment and wages. The unsustainable deficit will be used to cut entitlements if Trump is re-elected.
The article is bullshit. Watch what CEOs actually do; ignore what they have to say.
I don't believe in trickle-down economics, does not really work for the little-guy from what I've seen - I believe companies should act fairly but I don't believe they should be held accountable to fix society's ills - they are there to make a profit and they should make it fairly; but they are not there to be a charity for the less fortunate, IMO.
-----------------
I didn't say that. That's a strawman.
I'm quoting the first line of your thread:
"Shareholder value is no longer the main focus of some of America’s top business leaders."
The corporate tax windfall was used to buy back company stock. The only purpose of the stock buyback was to increase shareholder value. This was not pennies and dimes; it amounted to 100s of billions of dollars this year alone. That money came at the expense of taxpayers because it increased the deficit. CEOs benefited vastly more than the average shareholder.
How can you not possibly see the hypocrisy? To repeat: watch what CEOs do and ignore what they say. The tax cut was unpopular and people who read know the score. The CEO message is basically propaganda to avoid a progressive backlash.
B. Thats some pretty good talk though.
I dont have an issue with what theyre saying at all. But will they actualize the message? Some will, some wont’t and in a tight, competitive labor market the companies that take care of their people and communities will likely be better off in the long run (def true in the short run) as long as they're smart about it. Most shareholders are not going to put gender equality and lgbtq issues above the company making them money, though. There is definitely a line with the pc/social justice shit.
At the same time, climate change is a real, imminent threat to all of us and any major corporation that ignores that threat does so at their own peril. Even if theyre not legally obligated to give a shit, the stockowning public increasingly wants them to and i think that underpins the whole statement given.