Four years ago, the Business Roundtable released its landmark statement on a corporation’s purpose. Since then, the world has seen a pandemic, widespread civil unrest and a global cost-of-living crisis. It’s through that lens that Protiviti’s Jim DeLoach revisits the statement now.
The prevailing notion in the United States of a corporation’s purpose in a free-enterprise system, largely framed by the economist Milton Friedman, is that its responsibility to the public or society is subservient to satisfying the interests of its shareholders within the bounds of fair play. Over time, critics of Friedman’s view have expressed concern over the short-termism and dysfunction it spawns and, more important, its perceived ineffectiveness in addressing such 21st-century challenges like innovation, strategic renewal, environmental and social sustainability, domestic political pressures and changing geopolitical realities.
Four years ago, the Business Roundtable (BRT), an association of CEOs of leading American companies, issued its “Statement on the Purpose of a Corporation.” Citing the free-market system as “the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all,” the statement noted that the 181 CEOs who…
