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This past week, the U.S. Business Roundtable announced the release of a new "Statement of Purpose of a Corporation" signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders-customers, employees, suppliers, communities, and shareholders." The announcement is said to have come after many of its leaders pushed to turn the ship away from the decades old Friedman/Chicago School theory that the only purpose of a company is to maximize shareholder value. There is a sinking feeling among some CEOs that the body politic is turning away from predator capitalism due to out of control CEO pay and stock buybacks, pale and male boards, the decline of unions, outsourcing an

Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Am

Updated Statement Moves Away from Shareholder Primacy, Includes Commitment to All Stakeholders WASHINGTON – Business Roundtable today announced the release of a new Statement on the Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders. Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance. Each version of the document issued since 1997 has endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With today’s announcement, the new Statement supersedes previous statements and outlines a

Corporate panic about capitalism could be a turning point

“Evolve or die,” wrote hedge-fund billionaire Ray Dalio in a manifesto published in April titled “Why and How Capitalism Needs to Be Reformed.” With each passing month, more business executives have been joining this unlikely crusade to save capitalism from itself. The loudest reform call yet from inside the system came this week from the Business Roundtable, which represents the chief executives of 192 of the nation’s largest companies. Most of its members signed a statement declaring that making profits for shareholders isn’t a corporation’s sole responsibility. Instead, companies have a broader mission to serve customers, employees, suppliers and communities, too, the statement said. Jami

The Business Roundtable’s Strange Outbreak of Social Conscience

This week, the Business Roundtable put out a statement signed by 181 corporate CEOs purporting to redefine the purpose of the corporation. The statement, which has garnered widespread praise among commentators, basically proposes to junk the idea, fashionable since the 1980s, that the purpose of a corporation is to “maximize shareholder value.” Now these captains of industry propose to have the corporation revert to something like its posture during the New Deal–Great Society era, when corporations recognized a broader duty to “stakeholders,” meaning workers, communities, and the economy as a whole. That earlier model didn’t just happen, of course. It was the result of a power shift against

Top CEOs are reclaiming legitimacy by advancing a vision of what’s good for America

What most distinguishes America’s brand of capitalism is the widely held belief that the first duty of every business is to maximize value for shareholders. The benign version of this credo is that there is no way to deliver maximum value to shareholders over the long term without also satisfying the needs of customers, employees and the society at large. But in its more corrosive application — the one that is inculcated in business schools, enforced by corporate lawyers and demanded by activist investors and Wall Street analysts — maximizing shareholder value has meant doing whatever is necessary to boost the share price this quarter and the next. Over the years, it has been used to justify

Stores in Pittsburgh’s landmark Produce Terminal could move in by October

Pittsburgh Mayor Bill Peduto remembered his grandfather taking him as a child to the Produce Terminal in the Strip District, where they would purchase grapes to make “bad” wine. The mayor should be able to buy some good wine at the renovated terminal building along Smallman Street when the project is completed in August 2020. “If you’re Italian and from western Pennsylvania, this building connects to you directly,” Peduto said Tuesday. “It’s going to see another 100 years. We’re going to give her a brand new use and this building will be the lifeblood of the regeneration and rejuvenation of all along the Allegheny River from the Strip into Lawrenceville and all the way into Downtown.” Peduto

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