The Business Roundtable Gets the Memo

wake up and smell the coffee

In case you don’t know it, the Business Roundtable is made of the chief executive officers of America’s largest corporations.  You will not be surprised to learn that it has a long history of reactionary economic initiatives.

Man Bites Dog, Bigly

Today, the Business Roundtable issued a statement rejecting an important rightwing ideological claim, viz., that corporations must work exclusively for the benefit of their shareholders. Instead, it has adopted the retro left position, that was the prevailing orthodoxy in the pre-Reagan era, to wit, that corporations need to balance the interests of all their “stakeholders,” including their workers, the communities in which they operate, their customers, and of course their shareholders, too.

The controversy is described here.

Indeed, the new statement is inconsistent with the Roundtable’s prior position: hat the interests of stakeholders such as employees are only “relevant as a derivative of the duty to stockholders.”

Now, at this point, my good friend Red Ruby, down at the progressive table at Happy Acres, is thinking that I have wimped out on the evils of big business. Please let the record reflect that I deny the allegation and defy the allegator. The CEOs who make up the Business Roundtable have not suddenly decided to sell all they have and give it to the poor. No, the CEOs who make up the Business Roundtable have awakened, smelled the coffee, and gained some insight on what they need to do to protect their long-term prosperity.

Today’s statement from the Business Roundtable  follows:

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.

August 2019