181 American CEOs say companies should now focus on ‘improving society’ rather than profits

CEOs of 181 top American companies – including Apple and Amazon – say the new focus of corporations is to ‘improve society’ rather than make profits for shareholders

  • 181 CEOs of top US companies have re-defined the purpose of a corporation
  • Before the purpose of a corporation was defined as maximizing profits for stakeholders, now the purpose is to improve society as well
  • The new definition was released on Monday by the Business Roundtable, a group of top American CEOs that dates back to 1997
  • 181 CEOs signed the statement including J.P Morgan, Boeing, Apple, & Amazon
  • The new statement says corporations will focus on valuing customers, hiring diverse groups and compensating them fairly, and protecting the environment   

The CEOs of nearly 200 of the top companies in the U.S. have redefined the purpose of a corporation saying a stakeholder’s interests are no longer the top priority, now corporations have a responsibility to better society.

The new definition was released on Monday by the Business Roundtable, a group that dates back to 1997 and gathers over 200 of America’s most influential corporate leaders including top names like J.P Morgan, Boeing, Apple, and Amazon.

The statement redefined the purpose of a corporation with social consciousness in mind saying corporations are now committed to valuing customers, investing in employees by hiring diverse groups and compensating them fairly, dealing ethically with suppliers, protecting the environment with sustainable practices and supporting local communities.

It’s a stark contrast from the longstanding principle that companies function first and foremost to benefit shareholders and maximize their profits. 

The CEOs of 181 of the top companies in the U.S. have redefined the purpose of a corporation saying a stakeholder’s interests are no longer the top priority, now corporations have a responsibility to better society, preserve the environment and support local communities

'These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,' Jamie Dimon, the Chairman and CEO of JP Morgan Chase & Co and Chairman of the Business Roundtable, said Monday

‘These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,’ Jamie Dimon, the Chairman and CEO of JP Morgan Chase & Co and Chairman of the Business Roundtable, said Monday

‘The American dream is alive, but fraying,’ Jamie Dimon, the Chairman and CEO of JP Morgan Chase & Co and Chairman of the Business Roundtable said in the statement. 

‘Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,’ he added. 

‘This new statement better reflects the way corporations can and should operate today,’ Alex Gorsky, Chairman of the Board and Chief Executive Officer of Johnson & Johnson and Chair of the Business Roundtable Corporate Governance Committee said.

‘It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders,’ he added. 

Brian Moynihan, chief executive officer of Bank of America Corp., also signed the agreement

Mary Barra, chief executive officer of General Motors, also signed off on the new conscious capitalism definition

181 CEOs signed the statement redefining the purpose of a corporation including Amazon’s Jeff Bezos, Apple’s Tim Cook, Bank of America’s Brian Moynihan and General Motor’s Mary Barra (Pictured from top left to bottom right)

The statement was signed by 181 CEOs including Amazon’s Jeff Bezos, Apple’s Tim Cook, Bank of America’s Brian Moynihan, Boeing’s Dennis A. Muilenburg, GM’s Mary Barra, and BlackRock’ chief Larry Fink. 

The new idea takes from the concept of ‘conscious capitalism’ which promotes a company having a responsibility to serve society in addition to stakeholders, an ethos that has been growing in popularity with CEOs over the past decade. 

BlackRock CEO Larry Fink previously called for CEOs to rethink and re-evaulate the purpose of corporations, calling for corporations to offer guidance on social and economic issues including environmental safety and gender and racial equality.   

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. 

Source: Business Roundtable 

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