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CEOs redefine the purpose of corporation to promote an economy that serves all

 
 
 
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southernhybrid

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https://www.businessroundtable.org/business-roundtable-redefines-the-purpose-of-a-corporation-to-promote-an-economy-that-serves-all-americans


Business Roundtable today announced the release of a new Statement on the Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.

Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance. Each version of the document issued since 1997 has endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With today’s announcement, the new Statement supersedes previous statements and outlines a modern standard for corporate responsibility.

“The American dream is alive, but fraying,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. and Chairman of Business Roundtable. “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.”

“This new statement better reflects the way corporations can and should operate today,” added Alex Gorsky, Chairman of the Board and Chief Executive Officer of Johnson & Johnson and Chair of the Business Roundtable Corporate Governance Committee. “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”
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This has been on several news sites, but I choose a short one that anyone who is interested can read. Apparently, many large corporations are starting to realize that making shareholder value their primary goal isn't working. Are they coming to their senses? Are they afraid that workers and voters are becoming so disgusted with the current situation that they must do something more beneficial to the majority of Americans instead of catering to the wealthier class? Will this actually result in change?
 
I'm skeptical. Sounds like wolves making a pledge to become vegetarians.
 
I am skeptical too but there is no doubt in my mind that if corporations don't pay employees a reasonable wage that ultimately there will be few people to buy the goods. Someone's employee is some other company's customer. No good pay means no good customers in the long run.
 
The goal of corporate personhood ought to be long-term maximization of profit, which is actually sustainability of the corporation. When specific owners/CEOs look for a quick buck instead, it seems like they are more likely to take shortcuts and take advantage of people. When sustainability is considered, working with the community, developing employees, etc are needed. So is being environmentally conscious.
 
Don2 (Don1 Revised) said:
The goal of corporate personhood ought to be long-term maximization of profit, which is actually sustainability of the corporation. When specific owners/CEOs look for a quick buck instead, it seems like they are more likely to take shortcuts and take advantage of people. When sustainability is considered, working with the community, developing employees, etc are needed. So is being environmentally conscious.
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Agreed. The best companies are those who have the happiest most motivated employees, that support their community, practice sustainability, are environmentally friendly, and etc. These are the companies that the best employees in the area want to work for. And consumers want to buy their products.
 
Well, I can see from your thoughtful responses that you are all very open minded to this group's claims of wanting to change the nature of capitalism. /s

But, if any of you are honestly interested in learning more about this, I'm posting a link of the manifesto created by the originator of this idea. I really don't care if their original intentions are based on fear, greed, or they are having a change of heart. But, I do think it's very interesting that in the last year, a lot of very wealthy men have been trying to start movements like this one. Of course, if they wanted more credibility, they'd start by offering to cut their own salaries in half, but I'm going to follow what happens with this because these are very powerful and influential individuals and they probably could do something more substantial than government has been able to do.

https://economicprinciples.org/Why-and-How-Capitalism-Needs-To-Be-Reformed/


Part 1
Where I’m Coming From
I was lucky enough to grow up in a middle-class family raised by parents who cared for me, to be educated in a good public school, and to be able to go into a job market that offered me equal opportunity. One might say that I lived the American Dream. At the time, I and most everyone around me believed that we as a society had to strive to provide these basic things (especially equal education and equal job opportunity) to everyone. That was the concept of equal opportunity, which most people believed to be both fair and productive.
I suppose I became a capitalist at age 12 because that’s when I took the money I earned from doing various jobs like delivering newspapers, mowing lawns, and caddying, and put it in the stock market when the stock market was hot in the 1960s. That got me hooked on the investing game. I went to college and graduate school even though I didn’t have enough money to pay the tuitions because I could borrow the money from a government student loan program. Then I entered a job market that provided me equal opportunity, and I was on my way.
Because I loved playing the markets I chose to be a global macro investor, which is what I’ve been for about 50 years. That required me to gain a practical understanding of how economies and markets work. Over those years, I’ve had exposure to all sorts of economic systems in most countries and have come to understand why the ability to make money, save it, and put it into capital (i.e., capitalism) is an effective motivator of people and allocator of resources that raises people’s living standards. It is an effective motivator of people because it rewards people for their productive activities with money that can be used to get all that money can buy. And it is an effective allocator of resources because the creation of profit requires that the output created is more valuable than the resources that go into creating it. Being productive leads people to make money, which leads them to acquire capital (which is their savings in investment vehicles), which both protects the saver by providing money when it is later needed and provides capital resources to those who can combine them with their ideas and convert them into the profits and productivities that raise our living standards. That is the capitalist system.
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It's a rather long article if anyone is up to the task of reading it. It includes lots of graphs and statistics on a wide variety of topics related to poverty, poor schooling, income disparity etc. So, you can laugh and ignore it or you can learn something that I think is interesting to watch.

While I am skeptical, I don't see how this is a bad thing. Income inequality wasn't always as extreme as it is currently. I think it's very possible that some of these men are beginning to see the damage that it does to the country and to the average person.
 
Don2 (Don1 Revised) said:
The goal of corporate personhood ought to be long-term maximization of profit, which is actually sustainability of the corporation. When specific owners/CEOs look for a quick buck instead, it seems like they are more likely to take shortcuts and take advantage of people. When sustainability is considered, working with the community, developing employees, etc are needed. So is being environmentally conscious.
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Which is why I would like to see high salaries paid in stock (not stock options--they're part of the problem because they encourage risk taking) that can't be delivered for some time.
 
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