One of the US's most powerful business groups has abandoned the shareholder-first idea that has driven capitalism for decades.
The Business Roundtable said the pursuit of shareholder interests is no longer the central purpose of corporate America.
Companies should focus on social responsibilities as well as profits, the organisation said.
Business Roundtable members include some of the biggest firms in the US.
A statement released on Monday, titled Business Roundtable Redefines the Purpose of a Corporation to Promote "An Economy That Serves All Americans", was signed by the heads of more than 180 US companies. These included the chief executives of Amazon, American Airlines, and America's biggest bank, JPMorgan Chase.
The statement marks the first time the nearly 50-year-old group has said shareholder value is not the first priority. Shareholder primacy was an ethos championed by Nobel Prize-winning economist Milton Friedman and has been the foundation of corporate purpose.
The new mission statement comes at a time when companies are increasingly taking stances on issues outside of the corporate sphere due to pressure from activists amplified by social media and demands from their own employees.
No comments:
Post a Comment