There is a growing sense among U.S. business professionals that their guiding principles are off the mark. For nearly half a century, boardroom decisions have focused on maximizing the value delivered to shareholders. Profit has been the overriding consideration and other concerns do not matter. As inequality mounts and anger spreads throughout the United States, even those executives sense that they need to reassess core principles and priorities. This accounting is overdue and those executives should see how their peers in Europe and Japan do business for clues on how to reform.
This week, the Business Roundtable, a group of nearly 200 of America's top firms, released a statement declaring that firms should no longer focus on shareholders. Instead, they "share a fundamental commitment to all of our stakeholders." And, they continued, "we commit to deliver value to all of them, for the future success of our companies, our communities and our country."
For most people, that is common sense. Companies must be alert and responsive to a wide range of interests. After all, they could not function without their workers, suppliers or customers. Businesses are integral parts of a community, and they cannot divorce themselves from the larger environment in which they operate. Firms cannot sell products indifferent to the problems they create.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.