Following a decades of following a mostly profit-only model, a roundtable of American corporations has come together to redefine the purpose of a corporation in our society. This is notable in that it's the first time since 1978 that the Principles of Corporate Governance issued by the Business Roundtable includes a significant shift back to the American people, as opposed to shareholders.
“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.”
- Jamie Dimon, Chairman of 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."
The statement has been signed by 181 companies, including Johnson & Johnson, JPMorgan Chase & Co, to name a few. The complete statement is available here.
Whether this move is enough to move the needle on the growing distrust of multi-national corporations is yet to be seen. As new entrepreneurs continue pioneer the way they build their relationships and communities with their consumers, larger corporations are likely at a disadvantage when it comes to making agile changes demanded by today's consumer.