“An Economy That Serves All Americans”: Business Roundtable Redefines the Purpose of Corporations
Corporation CEOs took an important step to reframe how we, and they, think about their essential role in America. Far surpassing their influence on the economy, major corporations impact the lives of Americans in myriad ways. A commitment to serve all Americans is good for business and good for our communities.
Last week, the chief executives of America’s leading companies released a modern standard of corporate responsibility that commits to serving all stakeholders—customers, employees, suppliers, communities, and shareholders. The Statement on the Purpose of a Corporation replaces previously endorsed principles that corporations exist principally to serve shareholders, a tenet since 1997.
Signed by 181 CEOs—including leaders of Pfizer, General Dynamics, Comcast, Marriot, Bank of America, AT&T, Morgan Stanley, Freeport McMoRan, and Walmart—the statement specifically commits to protecting the environment through sustainable practices; investing in employees by providing training, fair compensation, and important benefits; and supporting communities and other businesses. The focus has shifted to generating long-term value for shareholders, a goal that is supported by building strength in the workforce and community where they work.
Embracing a vision for long-term value over short-term gains for shareholders as a shared principle encourages corporations to invest in their communities and employees. We have been fortunate in eastern Connecticut to see this type of investment. Our benefactors have supported our work with workforce development initiatives, small business growth, recruitment of talented labor, and an engaged, active community.
In this statement, corporate leaders commit a broader view of who they serve and how best to serve their business interests. It is a vision that can lead to sustainable, long-term prosperity across the economy.
From the Business Roundtable: Statement on the Purpose of a Corporation
Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.
While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:
- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.