Posted on 08/19/2019 6:37:05 AM PDT by Doctor Freeze
Shareholder value is no longer the main focus of some of America’s top business leaders.
The Business Roundtable, a group of chief executive officers from major U.S. corporations, issued a statement Monday with a new definition of the “purpose of a corporation.”
The re-imagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits. Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement....
(Excerpt) Read more at cnbc.com ...
This is what happens when corporate management no longer has to worry about a hostile takeover.
This was obvious a long time ago. So why do we buy stocks?
It also raises the question then of “Who is their master, who are they trying to please?”
Click bait headline.
From the end of the actual statement. Seems to me the shareholder hasn’t been forgotten. Its just at the end of a longer list.....
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.
Here is the full Business Roundtable statement....
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:
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.
They added....
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.
~~~~~
So, these CEO’s who live in a bubble, will IMMEDIATELY start to put AMERICAN workers/employees FIRST, right?
Easy for them to re-align their ‘priorities’, especially guys like Bezos, who have all of the wealth THEY will ever need.
This is a major item on the Leftist wish list.
Redefine what a corporation is and give it new goals
that supersede shareholder value.
They’ll enshrine this in law when they get the chance.
MBA programs have been infested by Leftists just like all the rest of higher education.
Once those companies start going out of business, those leaders will be replaced.
Unless the gov’t will rescue them.
Use that list as a list of companies in which it would be wise not to invest. I support the idea of not sacrificing long-term profits by chasing short-term profits, but when profits themselves are not the primary goal there is a problem.
Fascism is defined as the merging of state and corporations.
“The re-imagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits. Rather, investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals, according to the statement...”
Translation: If we are successful at “investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities” and have profits so low we got out of business, that would still be O.K.
"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit." -- Robert A. Heinlein
CEO who need to be shown their cards.
What they really mean is pushing their political agenda.
You can be dam well be sure that is not the mission of the CEOs of most of America’s biggest corporate competitors the world over.
Made possible by several decades of very cheap money and bubble-blowing from the Federal Reserve
I think this is a reasonable adjustment to the Jack Welch era. That half a criminal raided G.E. Destroyed the institutional knowledge and heritage. Jack did that to squeeze short term profits from the company at the expense of the long term viability of the company.
Pure propaganda since the CEO’s and the B.O.D. can be sued by the shareholders if they do not take every opportunity to legally increase share value for the owners (share holders) of the company.
These announcements are to gain favor from the “woke” in an attempt to avoid boycotts by the freaks.
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