Top CEOs Said Shareholder Value is No Longer Main Objective

Top CEOs Said Shareholder Value is No Longer
Main Objective
Shareholder value is no longer the main focus of some of America’s top business leaders.
The Business Roundtable, a group of chief executive officers from major U.S. corporations,
issued a statement Monday with a new definition of the “purpose of a corporation.”
The reimagined idea of a corporation drops the age-old notion that corporations function first
and foremost to serve their shareholders and maximize profits. Rather, investing in employees,
delivering value to customers, dealing ethically with suppliers and supporting outside
communities are now at the forefront of American business goals, according to the statement.
“While each of our individual companies serves its own corporate purpose, we share a
fundamental commitment to all of our stakeholders,” said the statement signed by 181 CEOs.
“We commit to deliver value to all of them, for the future success of our companies, our
communities and our country.”
The conscience of Wall Street has been at the forefront of American business and politics
recently as issues about economic equality and fair business practices dominate the 2020
election stage and the overall news cycle.
The Business Roundtable, founded in 1972, has put out many statements on the principles of
corporate governance since the late 1970s. It said this new definition “supersedes” past
statements and outlines a “modern standard for corporate responsibility.”
“The American dream is alive, but fraying,” Jamie Dimon, chairman and CEO of J.P. Morgan
Chase and chairman of Business Roundtable, said in a press release.
Along with Dimon, the statement received signatures from chiefs including Amazon’s Jeff
Bezos, Apple’s Tim Cook, Bank of America’s Brian Moynihan, Dennis A. Muilenburg of
Boeing and GM’s Mary Barra.
“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,” said Dimon.
Another one of the signatures is from BlackRock chief Larry Fink, who has previously called
on CEOs to reevaluate the purpose of a corporation, specifically the “inextricable link” between
purpose and profit.
“Purpose is not the sole pursuit of profits but the animating force for achieving them,” Fink
wrote in his 2019 annual letter to shareholders.