CEOs Say Shareholder Value No Longer Their Main Objective
On August 19, The Business Roundtable, a group of chief executive officers of nearly 200 major U.S. corporations, issued a statement with a new definition of the “purpose of a corporation.” It drops the age-old notion that they function first and foremost to serve their shareholders and maximize profits. It places stakeholders over shareholders. 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 new definition.
Business Roundtable – “Our Commitment”
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. “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.