In a dramatic shift, America’s top CEOs recently put their signatures on a commitment to a new objective: exercising a responsibility to society at large.
“This is a huge statement from one of the most influential groups in American business,” said Stuart Bunderson, the George & Carol Bauer Professor of Organizational Ethics & Governance and director of Olin Business School’s Bauer Leadership Center at Washington University in St. Louis.
On Aug. 19, the Business Roundtable issued an open letter titled “Statement on the Purpose of a Corporation.” One of the most powerful lobbies in the United States, the group represents American industry and includes the CEOs of companies from American Express and Apple to St. Louis-based World Wide Technologies and Walmart.
The one-page declaration, with 181 signatures, ends as follows: “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.”
Said Bunderson, “This statement really says something powerful about opening the door for those CEOs who want to think more broadly about the purpose of the enterprise.”
The Business Roundtable’s shift dovetails nicely with one of Olin’s key strategic pillars: values-based, data-driven decision-making. Bunderson and Seethu Seetharaman, the W. Patrick McGinnis Professor of Marketing, are teaching a new, related course at Olin.
The Business Roundtable’s previous statement of purpose espoused economist Milton Friedman’s decades-old theory that a company’s only obligation is to maximize value for its shareholders.
The new statement says something very different, Bunderson noted.
“It suggests that organizations should be thinking about all of their stakeholders, not just shareholders, but also their suppliers, their customers, the communities in which they work,” he said
This summer, Bunderson and Seetharaman taught values-based, data-driven decision-making to Olin’s nearly 100 first-year MBA students as the students launched their global immersion.