Some familiar company names were on the list last Monday when 181 CEOs signed a new “Statement on the Purpose of a Corporation.” All of the companies are members of the Business Roundtable, an association of CEOs of American companies. The group has issued such statements periodically since 1978.
“Each version of the document issued since 1997 has endorsed principles of shareholder primacy — that corporations exist principally to serve shareholders,” the Business Roundtable noted. What’s different this time is that the new statement, the group said, “outlines a modern standard for corporate responsibility” that “redefines the purpose of a corporation to promote ‘an economy that serves all Americans.’ ”
The CEOs signing the statement said their companies remain committed to generating long-term value for shareholders. But they now also are expressing commitment to delivering value to their customers, employees, suppliers and communities.
“Each of our stakeholders is essential,” the group said. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
The whole list of CEOs is posted online, but here are just a few of the companies represented:
- Pharmaceutical companies Abbott, Allergan and Pfizer;
- Health insurer Anthem;
- Food service, facilities, and uniform services provider Aramark;
- Investment manager BlackRock;
- Commercial real estate services and investment firm CBRE;
- CVS Health, parent of Omnicare;
- Consulting firms Deloitte, KPMG and PwC;
- Johnson & Johnson;
- Consumer goods company Procter & Gamble, of which P&G Professional is a part;
- Stanley Black & Decker, parent of Stanley Healthcare;
- Steelcase furniture; and
- Walgreens Boots Alliance, which was announced in 2017 as a minority investor when a newly formed company controlled by KKR acquired PharMerica.
“This new statement better reflects the way corporations can and should operate today,” Alex Gorsky, chairman of the board and CEO of Johnson & Johnson and chair of the Business Roundtable Corporate Governance Committee, said in a statement. “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”
Release of the statement has generated varying reactions, from curiosity as to the reasoning and timing behind the release to skepticism as to the sincerity of the signers to hope that the public claims will result in benefits for everyone. Time will tell whether these corporations will live up to the “modern standard” they have established for themselves, but the eternal optimist within me is holding off the cynic — for now — and I’m eager to see what happens next.