Since 1997, a group of CEO’s of the biggest American corporations have been getting together in an annual Business Roundtable summit. In their most recent summit, they issued a startement committing to a new purpose of a corporation (since 1997, this has been to serve shareholders, and to maximize shareholder value). The new mandate includes this, but also some other committments:
- 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.
I am immediately reminded of the leadership lattice - a mental model for how companies work and leader’s role within it. The lattice describes how leaders have to manage their attention towards individual growth, team productivity, the product of their effort, the extent of impact in their market, and the second order effects of that impact. This broader responsibility is reflected in this mandate as well with some level of committment from the CEO’s of these orgs. While it feels good to commit to this, it feels reactionary, a bit late, and I remain skeptical about it’s impact. I hope I’m wrong.