On 19 August The Business Roundtable, a group of chief executive officers from major US corporations, issues a new position on the “purpose of a corporation.” Over 180 chief executives, including Walmart and JPMorgan Chase, overturned three decades of orthodoxy on shareholder primacy. The statement acknowledged that the duty of management and directors is not foremost to maximise shareholder value. They need to exercise accountability towards all stakeholders. The statement highlights five stakeholder groups, listing shareholders last and describing them as “providers of capital”. The new doctrine appears to be that of Capital Providers, Employees, Customers, Suppliers and Community or CPECSC primacy. The American Council of Institutional Investors responded critically that the decision to drop the doctrine of shareholder primacy would lead to “accountability to no one“.
Menu
