The CEOs of nearly 200 of the top companies in the U.S. have redefined the purpose of a corporation, saying a stakeholder’s interests are no longer the top priority - and the new focus is to better society.
The updated definition was released on Monday by the Business Roundtable, a group that dates back to 1997 and gathers together many of America’s most influential corporate leaders including top names like J.P Morgan, Boeing, Apple, and Amazon.
The statement redefined the purpose of a corporation with social consciousness in mind, saying corporations are now committed to valuing customers, investing in employees by hiring diverse groups and compensating them fairly, dealing ethically with suppliers, protecting the environment with sustainable practices and supporting local communities.
It's a stark contrast from the longstanding principle that companies function first and foremost to benefit shareholders and maximize their profits.
The CEOs of 181 of the top companies in the U.S. have redefined the purpose of a corporation saying a stakeholder’s interests are no longer the top priority, now corporations have a responsibility to better society, preserve the environment and support local communities
'These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,' Jamie Dimon, the Chairman and CEO of JP Morgan Chase & Co and Chairman of the Business Roundtable, said Monday
'The American dream is alive, but fraying,' Jamie Dimon, the Chairman and CEO of JP Morgan Chase & Co and Chairman of the Business Roundtable, said in the statement.
'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,' he added.
'This new statement better reflects the way corporations can and should operate today,' Alex Gorsky, Chairman of the Board and Chief Executive Officer of Johnson & Johnson and Chair of the Business Roundtable Corporate Governance Committee said.
'It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders,' he added.
181 CEOs signed the statement redefining the purpose of a corporation including Amazon's Jeff Bezos, Apple's Tim Cook, Bank of America's Brian Moynihan and General Motor's Mary Barra (Pictured from top left to bottom right)
The statement was signed by 181 CEOs including Amazon’s Jeff Bezos, Apple’s Tim Cook, Bank of America’s Brian Moynihan, Boeing's Dennis A. Muilenburg, GM’s Mary Barra, and BlackRock' chief Larry Fink.
The new idea takes from the concept of ‘conscious capitalism’ which promotes a company having a responsibility to serve society in addition to stakeholders, an ethos that has been growing in popularity with CEOs over the past decade.
BlackRock CEO Larry Fink previously called for CEOs to rethink and re-evaulate the purpose of corporations, calling for corporations to offer guidance on social and economic issues including environmental safety and gender and racial equality.
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:
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
The companies who signed off on the new definition: A.O. Smith Corporation, Abbott, Accenture, ADP, Aecom, The Aes Corporation Aflac, Ak Steel corporation, Allergan Plc, Alliant Energy, Altec Inc., Amazon, American Airlines, American Electric Power, American Express, American Tower Corporation, Ameriprise Financial, Anthem, Inc., AON, Apple, Aramark, Assurant, AT&T Inc, Ball Corporation, Bank of America, Baxter International Inc., Bayer USA, BCG, Bechtel Group, Inc, Best Buy Co, Inc., Blackrock, BNY Mellon, Boeing, Borgwarner, BP PLC, Bristol-Myers Squibb, C.V. Starr & Co, The Carlyle Group, Caterpillar, CBRE Group, CF Industries, Chevron Corporation, Chubb, Cigna, Cisco Systems, Citigroup, CNH Industrial, Coca-Cola, Cognizant, Comcast Corporation, Conocophillips Company, Corning Incorporated, Cummins Inc, CVS Health, Day & Zimmermann, Dell Technologies, Deloitte, Dow, Duke Energy, DXC Techinology, Eastman Chemical Company, Eaton, Edison International, Exxon Mobil, Ey, Fedex Corporation, FIS, Flex, Fluor Corporation, Ford Motor Company, Fox Corporation, Freeport-McMoran Inc, General Dynamics Corporation, General Motors, Goldman Sachs Group, Guardian Life Insurance, HanesBrands, Harman International, Hearst, Home Depot, Honeywell, Huntington Ingalls Industries, IBM, Infor, International Paper Co, Interpublic Group, ITC Holdings Corp, Jacobs, John Deere, Johnson & Johnson, Johnson Controls, JPMorgan Chase & Co, Keycorp, Kiewit Corporation, KPMG, L3harris Technologies, Land O’Lakes, Leidos, Lennar Corporation, Lockheed Martin, Lyondellbasell Industries, Macy’s, Mallinckrodt Pharmaceuticals, Marathon Oil, Marathon Petroleum, Marriot International, Massmutual Mastercard, McCormick and Company, McKesson Corporation, Medtronic, Metlife, Micron Technology, Moelis & Company, Morgan Stanley, Motorola Solutions, Nasdaq, National Gypsum Company, New York Life Insurance, Noble Energy, Northrop Grumman, Novelis, NRG Energy, Oracle, Owens Corning, Pepsico, Pfizer, Phillips, Pitney Bowes, Principal, Procter & Gamble, Progressive, PWC, Qualcomm Incorporated, Quanta, Raytheon, Rockwell Automation, S&P Global, Salesforce, SAP, SAS Institute, Schnitzer Steel Industries, Sempra Energy, Siemens Corporation USA, Silver Lake, Southern Company, Standley Black & Decker, Steelcase Inc, Stryker, Suffolk, Target, TC Energy, Telephone & Data Systems, Texas Instruments Incorporated, Tishman Speyer, Travelers Companies Inc, TSYS, Turner Construction Co, Union Pacific, United Airlines, United Technologies Corporation, UPS, USAA, Vanguard, Verisk Analytics, Visa, Vista Equity Partners, Vistra Energy, Walgreens Boots Alliance, Walmart, Wesco International, Western & Southern Financial Group, Western Union, Whirlpool corporation, Wipro Limited, World Fuel Services Corporation, World Wide Technology, Xerox Corporation, Xylem Inc, Zebra Technologies Corporation, 3M
Source: Business Roundtable