Serious news coverage has emerged this year about whether corporations should shift their purpose from solely profit to include social concerns to benefit society. In August 2019 one hundred and eighty-one executives from the Business Roundtable voted to support such changes and replaced their old 1979 mission statement (pursue solely profit) to include addressing all stakeholders including “customers, employees, suppliers, communities, and shareholders”. This is a radical change from 1970’s Milton Friedman’s views. Does it make any sense?
The Business Roundtable movement includes such companies such as Apple, JP Morgan Chase (their CEO, Jamie Dimon is the chairman of JP Morgan Chase), GM, Walmart, and Bank of America. In parallel with this is the movement of some investors to pursue socially responsible investments in their 401K choices. Also younger generations have a greater sense of social responsibility and say they will buy accordingly. Is this a real movement?
Questions for discussion:
Why has this new view of corporate responsibility arisen now? What are the potential reasons?
• Workers continue to lose their voices regarding working conditions, e.g. scheduling, benefits, anti-compete, etc.
• Corporations use their power to direct government support to themselves, e.g. tax breaks, less regulations, etc.
• Popular concern with income inequality, loss of middle class, breakdown of work/life balance, etc.
• The federal government is taking no action to protect society, e.g. permitting pollution, less health care, degradation of parks, etc.
• Can history provide any additional insight?
What actions can cooperative corporations take?
• Will shareholders abandon them? Or appreciate their contributions?
• What can be measured to reveal both the efforts and the potential benefits? Surveys? Market share?
How could this be implemented?
• Self-initiated by ‘enlightened’ corporations?
• By the investment choices made in the stock market?
• By new government directions or regulations?
• From the growth in the power of employees?
• Something else? Companies creating a set of corporate ethical rules that will guide all their decisions?
Come and have a say in this emerging issue.
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