Dear Business Leaders,
When the Business Roundtable articulates a new statement on the purpose of the corporation, people listen. The businesses these 181 CEOs lead (including Apple, American Airlines, Accenture, AT&T, Bank of America, Boeing, Comcast, J.P. Morgan Chase and Co.) impact the majority of people in the world. That is why we are excited and gratified by the Business Roundtable’s new Statement on the Purpose of a Corporation (the full statement is included below).
Many people are commenting on this shift. Some are providing encouragement and advice from personal experience, like Bob Chapman from Barry-Wehmiller, who wrote an open letter that we recommend.
Others are critical. Some are saying it’s a way of avoiding accountability – even though this is about increasing the accountability of businesses to more people and groups. Some are saying it’s a call to sacrifice profits or take money from one group to give to another – even though research shows that businesses that take care of each of their stakeholders and look for win-win-win solutions that benefit everyone outperform those that look to take from one group and give to another. Some are saying that businesses shouldn’t be the ones who determine what is in the interest of each stakeholder group –
even though businesses don’t create so much as they respond to the interests of those they serve. This refocuses businesses on serving the interests of everyone they impact.
We’ve heard all this before. Long before the Conscious Capitalist Credo was drafted, the same criticisms were leveled against the many businesses who operated on these principles. Just as you are now committing yourselves to a new set of principles in your own businesses and “calling on others to do their part as well”, we want to invite you to join a larger movement of businesses and business leaders who have been practicing and advocating for these principles for decades.
Conscious businesses place the well-being of people and the planet at the center of everything they do. They operate with an inspiring higher purpose that aligns with societal imperatives and are led by leaders deeply committed to using business to create multifaceted well-being. They have work cultures rooted in trust, caring and transparency, and tap into deeper sources of creative human energy. They reject false trade-offs between stakeholder priorities and develop creative ways to harmonize stakeholder interests and achieve win-win outcomes. They utilize innovative business models that are both transformative and inspirational, and can help solve the world’s many social and environmental problems while generating economic wealth.
We invite you to connect with the Conscious Capitalism movement and together we’ll build a robust community of leaders who seek to elevate humanity through business. We invite you to both learn from what others have done to help your businesses turn these words into actions, and share what you are doing so others can learn from you. And we invite you to share stories of how you’re living out your corporate purpose so it becomes more than just an abstract statement.
The shareholder supremacy model of business is fundamentally flawed. The stakeholder orientation that you have committed to is sound: “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.” It is an important step towards this becoming the norm for businesses everywhere and living up to the full potential of capitalism.
A growing body of research shows that companies that embrace the principles of Conscious Capitalism substantially outperform their peers financially over the long term, while creating many kinds of non-financial wealth for all stakeholders. They maximize the “total value created” on a sustained basis and share that value with all their stakeholders. Such businesses enhance the overall health and well-being of society, and bring joy, fulfillment and a sense of meaning to all their stakeholders. Their very existence enriches the world.
Thank you for taking this commitment on. We look forward to seeing you live it out and hope that you will work with others to spread this commitment to all businesses, as well as to future generations of business leaders through our business education system.
Alexander McCobin, CEO of Conscious Capitalism, Inc.
The Business Roundtable’s statement, in full:
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:
- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
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.