Economy Shareholder Value Is No Longer Everything, Top C.E.O.s Say

[dissectingaorticaneurysm]

Chief executives from the Business Roundtable, including the leaders of Apple and JPMorgan Chase, argued that companies must also invest in employees and deliver value to customers.
https://www.nytimes.com/2019/08/19/business/business-roundtable-ceos-corporations.html

Nearly 200 chief executives, including the leaders of Apple, Pepsi and Walmart, tried on Monday to redefine the role of business in society — and how companies are perceived by an increasingly skeptical public.

Breaking with decades of long-held corporate orthodoxy, the Business Roundtable issued a statement on “the purpose of a corporation,” arguing that companies should no longer advance only the interests of shareholders. Instead, the group said, they must also invest in their employees, protect the environment and deal fairly and ethically with their suppliers.

It was an explicit rebuke of the notion that the role of the corporation is to maximize profits at all costs — the philosophy that has held sway on Wall Street and in the boardroom for 50 years. Milton Friedman, the University of Chicago economist who is the doctrine’s most revered figure, famously wrote in The New York Times in 1970 that “the social responsibility of business is to increase its profits.”​

You are right to be skeptical about their motives, but it does signal that they feel threatened by the possibility of a unified revolt if things continue at the current levels of inequality and reckless disregard for the planet.

The latest shift in thinking is an implicit recognition that corporations have a larger responsibility than a return on investment and also that more Americans are living under duress today. Wage gains have been nonexistent to moderate for years. Economic research as well as government data point to an era in which Americans must do more for less.

“The American dream is alive, but fraying,” Dimon said in a prepared statement.
https://opportunity.businessroundtable.org/ourcommitment/​

 

[TheTimeIsNotNow]

Actions speak louder than words, I’ll believe it when i see it, etc..

 

[dissectingaorticaneurysm]

https://www.latimes.com/business/story/2019-08-20/business-roundtable-propaganda-david-lazarus
Column: CEOs say they care about customers and workers. Propaganda experts are unimpressed

“It seems pretty obvious that CEOs are trying to head off growing public pressure on a number of fronts, including how much they’re paid and taxing the rich,” Osgood said.


“Basically, they’re worried about undoing all the things that the Trump administration has done for them.”

“There seems to be a concern among the CEOs that they’re becoming the bad guys,” said Nicholas J. Cull, a professor of public diplomacy at USC who focuses on propaganda studies.

“This suggests that the business community is expecting blowback from their policies, and they’re trying to get ahead of it,” he said.

 

[JonesBones]

I laughed at this. Still laughing. Empty rhetoric.

"If they were so concerned about communities and workers, they'd take a three-quarters pay cut and give some of it back, but they're not," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.

"It's political and self-serving," Elson added. "By coming up with these standards, they don't have to be accountable to anybody."

https://www.cbsnews.com/news/top-ceos-say-it-should-no-longer-be-only-about-shareholder-value/

 

[dissectingaorticaneurysm]

I laughed at this. Still laughing. Empty rhetoric.

"If they were so concerned about communities and workers, they'd take a three-quarters pay cut and give some of it back, but they're not," said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware.

"It's political and self-serving," Elson added. "By coming up with these standards, they don't have to be accountable to anybody."

https://www.cbsnews.com/news/top-ceos-say-it-should-no-longer-be-only-about-shareholder-value/

it's a token gesture of goodwill because they expect a Dem to win the election. Warren is the current Vegas favorite for the primary and Wall Street no doubt agrees. I'm curious to see how deeply they would wound themselves to stave off government intervention.

 

[Javelina]

does this story come in shorter or interesting?

 

[hillelslovak87]

This is nothing but a corporate cock waggle. It's like when they abuse the public and fuck up, we see a slew of pr ads on tv telling you, in pure Madison Avenue fashion, that they're leading innovation for the American people, or some such horseshit, like always.

 

[JonesBones]

it's a token gesture of goodwill because they expect a Dem to win the election. Warren is the current Vegas favorite for the primary and Wall Street no doubt agrees. I'm curious to see how deeply they would wound themselves to stave off government intervention.

No. It has nothing to do with that. It is the same reason all these billionaires say they want their taxes raised and donate a lot to their own charities. That is preemption too. What are they gonna say? "Fuck off, I like that the tax system is in my favor." This conversation exists outside partisan politics and is a way for the rich to make people think they are making things right. There is some interesting literature on Bill Gates' stranglehold on world health policy for example. Billionaires are now deciding heath policy. Bill Gates is basically the Czar of World Health.

 

[dissectingaorticaneurysm]

does this story come in shorter or interesting?

For the past century—but especially since the 1970s or so—most big businesses have operated under the principle that the only thing that matters at the end of the day is making money for the shareholders and/or owners. That’s it. That’s the only real responsibilities businesses have, beyond any pesky legal or regulatory ones. (And there’s ways to deal with those things, too.)

That idea has dominated the business world for decades now. Proponents say it’s easy, it’s common sense and it enables businesses to do what businesses are supposed to do: make money for the people who provided you with capital in the first place.

But the idea’s come under fire more and more in recent years, especially as average wages remain stagnant. Critics say the philosophy is too short-sighted, too centered around quarterly returns instead of long-term value, and that it ignores environmental and social responsibility as well as the welfare of workers and customers. To many people, it doesn’t feel like capitalism—let alone totally unrestricted capitalism—is lifting people out of poverty en masse anymore, or even out of the middle class.

Here are the signatures.

tldr: they fear proletariat pitchforks if they continue raping us at the current pace.

 

[JDragon]

Actions speak louder than words, I’ll believe it when i see it, etc..

At the end of the day, profit is everything. Profit enables a company to grow, to invest, to survive and it maximizes C-level pay, too.

But if you look at what they said and wrote there, it is nothing too outrageous imo. I mean, if you don't care if your company still exists ten years from now, you can go on maximizing shareholder value and purely run on quarterly results. But I have been involved in corporate and divisional strategy of large companies for years now and I have witnessed also discussions that led to decisions among board members. From these experiences, I would assume:

• CEOs find the trend for diversity and pushing women rather amusing, but they consider it important for employer branding purposes.
• Delivering value to customers is an obvious one, especially in a world where almost all products can be replaced with low-cost alternatives and customer loyalty is getting harder to gain and retain.
• The supplier thing I would also be skeptical of because not only is this a cost issue, it is also often not feasible. Reputational risk is high, however.
• Protecting the environment is also obvious I think. Reputational risk is super high and will hurt the bottom line.

In other words, maybe it is just a matter of time horizon.

 

[dissectingaorticaneurysm]

No. It has nothing to do with that. It is the same reason all these billionaires say they want their taxes raised and donate a lot to their own charities. That is preemption too. What are they gonna say? "Fuck off, I like that the tax system is in my favor." This conversation exists outside partisan politics and is a way for the rich to make people think they are making things right. There is some interesting literature on Bill Gates' stranglehold on world health policy for example. Billionaires are now deciding heath policy. Bill Gates is basically the Czar of World Health.

No, this is different from Zuck and Bill's tax mitigation deceptions. The ruling class is aware that unrest is growing but unwilling to formulate a proper response. This is just acknowledgement without action at this point. An IOU.

 

[Javelina]

you realise that hal yoh signed that right?

 

[para1]

Verizon's revenue last year was $130.863B. AT&T's revenue last year was $170.756B. Yet these corporations continue to discriminate and refuse to provided broadband service to over 19 million Americans. And Stephenson signing is the biggest tip that this is bullshit, the man hates everyone not in his tax bracket.

 

[xcvbn]

Amazing what a single worker-friendly presidential candidate can do

But their signatures don't mean shit. We won't forget how they spent decades exploiting and abandoning American workers.

 

[AndroidRage]

No. It has nothing to do with that. It is the same reason all these billionaires say they want their taxes raised and donate a lot to their own charities. That is preemption too. What are they gonna say? "Fuck off, I like that the tax system is in my favor." This conversation exists outside partisan politics and is a way for the rich to make people think they are making things right. There is some interesting literature on Bill Gates' stranglehold on world health policy for example. Billionaires are now deciding heath policy. Bill Gates is basically the Czar of World Health.

Did you hear that Gates apparently was in Epstiens will?

 

[JudoThrowFiasco]

Virtue signalling knowing that automation is on the rise.

Also, hard laugh out loud at them being afraid of the 3rd estate - the bottom 60 is made up mostly children, elderly, skilless, disabled minority women. The top 20 runs the nation, hold all the real power and want profit first approach

 

[VivaRevolution]

I'll believe it when I see it.

Sounds like another empty PR gesture like the 1,000's before it.

 

[Lead]

Saying stuff like that is good for the company and this it’s shareholders. Boards do have to factor in stakeholders as well but the shareholder is meant to be the main priority. I don’t see a problem with what they said. It isn’t that controversial and is taught in some basic business courses.

 

[HockeyBjj]

Lol. Of course they say that to the public

Now what are they saying behind closed doors to each other and said shareholders?

 

[Andy Capp]

Actions speak louder than words, I’ll believe it when i see it, etc..

Yup. And they should make it quick.