New York (CNN Business)
The Business Roundtable on Monday said America’s corporations are responsible for improving society by serving all stakeholders ethically, morally and fairly. It’s a departure from the business theories of Milton Friedman, the Nobel-Prize-winning economist who said society benefits most from companies that grow their profit and serve one master: shareholders
The Business Roundtable, led by JPMorgan’s Jamie Dimon, represents CEOs and tries to influence policymaking. Since 1978, it has occasionally released principles of corporate governance, and in each of the last 22 years, the company has said the primary responsibility of companies is to their shareholders.
The new statement is banal: It’s an updated mission statement for a Washington advocacy group. At the same time, it’s a powerful new direction that evokes some of America’s more progressive voices, including Democratic candidate for president, Senator Elizabeth Warren.”The American dream is
On the campaign trail, Warren and some other progressive candidates contend corporations have a responsibility to better society by paying their employees living wages. For example, Warren frequently tells a story about her mother saving the family home by getting an entry-level job at Sears.
The Business Roundtable agreed, saying investing in employees begins with fair compensation and benefits. The CEOs also committed to worker training so employees could develop new skills as automation and other disruptive technologies take hold. And the group pledged to foster diversity, inclusion, dignity
The new mission statement also includes customers, suppliers
For years, companies have given back to communities through investments in local education, health care, urban development and funding for the needy. Recently, many corporations have worked to lower their carbon footprint to combat the climate crisis. Those goals will benefit society,
CEOs continue to include shareholders in their list of masters too. The Business Roundtable noted companies rely on shareholders to
“These modernized principles reflect the business community’s
Updated 11:40 AM ET, Mon August 19, 2019