A “business roundtable” has spewing words about “shareholder value is not the first priority”. Call my cynical (I’m a Diogenes fan, anyway) but I don’t trust their motives.
An anti-capitalist revolution is coming, and the only reason the targets of the revolution want to be its leaders is to direct it and decide who gets run over – so it won’t be themselves. The catholic cult has done the same, switching sides to avoid the wrath of revolutionaries, not because they support freedom.
A statement released on Monday, titled Business Roundtable Redefines the Purpose of a Corporation to Promote “An Economy That Serves All Americans”, was signed by the heads of more than 180 US companies. These included the chief executives of Amazon, American Airlines, and America’s biggest bank, JPMorgan Chase.
The statement marks the first time the nearly 50-year-old group has said shareholder value is not the first priority. Shareholder primacy was an ethos championed by Nobel Prize-winning economist Milton Friedman and has been the foundation of corporate purpose.
The new mission statement comes at a time when companies are increasingly taking stances on issues outside of the corporate sphere due to pressure from activists amplified by social media and demands from their own employees.
But some critics were sceptical, with Larry Summers, who served as US Treasury secretary under President Bill Clinton, saying there was no legal requirement on firms to change their approach.
He told the Financial Times: “I worry the Roundtable’s rhetorical embrace of stakeholders is in part a strategy for holding off necessary tax and regulatory reform.”