Capitalism Is Already Accountable To Stakeholders

Anne Marie Knott, Robert and Barbara Frick Professor of Business

 

In August, the Business Roundtable issued a Statement on the Purpose of a Corporation, in which its members declared a list of duties to all their stakeholders, including commitments to deliver value to customers, invest in employees, deal fairly and ethically with suppliers, support their communities and generate long-term value for shareholders.

Two months later, in letters to Roundtable CEOs, Sen. Elizabeth Warren (D-MA) seized on this, saying the new statement “reversed the Business Roundtable’s troubling position, held since 1977, that ‘corporations exist principally to serve shareholders’.” She then directed each of the CEOs to respond in writing by October 25, telling her a) whether they support the Accountable Capitalism Act she plans to reintroduce in coming weeks, and b) what concrete steps their company is taking to meet its commitments to each stakeholder group.

Read the full piece in Forbes.

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