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One Year Later: Purpose of a Corporation

HOW CEOS PUT PRINCIPLES INTO PRACTICE

On August 19, 2019, 181 CEOs of America’s largest corporations overturned a 22-year-old policy statement that defined a corporation’s principal purpose as maximizing shareholder return.

In its place, the CEOs of Business Roundtable adopted a new Statement on the Purpose of a Corporation declaring that companies should serve not only their shareholders, but also deliver value to their customers, invest in employees, deal fairly with suppliers and support the communities in which they operate.

The updated Statement better reflected the way CEOs endeavor every day to create value for all of their stakeholders and challenged companies to do more. Through a year of unprecedented crisis, the nation’s companies have held to their commitment and risen to the challenge. Business Roundtable companies have invested in workers, taken a leading role in fighting the pandemic, and supported the communities where they serve. Companies have powerfully demonstrated their commitment to work for the benefit of all stakeholders through the current crises.

Read The Full Statement On The Purpose Of A Corporation

During a time of tremendous challenge, Business Roundtable CEOs have shown what it means to live the principles we announced almost a year ago. Concurrent health, economic and racial crises have made clear how various systems are connected – and that multi-stakeholder capitalism is the answer to addressing our challenges holistically. America’s CEOs remain steadfast in our commitment to pursue economic prosperity and expanded opportunity for our employees, customers and the communities we serve.

Doug McMillon

President and Chief Executive Officer, Walmart

Chairman, Business Roundtable

Reflecting on the Anniversary

ON THE FIRST ANNIVERSARY OF BUSINESS ROUNDTABLE’S UPDATED STATEMENT ON THE PURPOSE OF A CORPORATION, CHAIRMAN DOUG MCMILLON AND BOARD MEMBER MARY BARRA REFLECT ON THE IMPORTANCE AND SHARE HOW COMPANIES HAVE DEMONSTRATED THEIR COMMITMENT TO WORK FOR THE BENEFIT OF ALL STAKEHOLDERS.

In the months that followed the release of our Statement, Business Roundtable CEOs took action to invest in worker training and education, raise wages, support new employee health and wellness benefits, promote more sustainable businesses and give back to the communities they serve.

Business Roundtable CEOs called for an increase in the federal minimum wage, access to paid family medical leave for more Americans and funding to support historically Black colleges and universities and other minority-serving institutions.

SPOTLIGHT ON

Employees & Communities

Business Roundtable member companies have always maintained that investing in employees and communities is important to generate profits and return value to shareholders. But the best-run companies do more. Roundtable CEOs are helping workers adjust to the rapid pace of change in the economy while working to revitalize local economies and ensure more inclusive prosperity. We’ve made progress but we know that there is more work to do.

Learn More About Employee Initiatives

Learn More About Community Initiatives

One year ago, the Business Roundtable redefined the Purpose of a Corporation because we believed it was important to articulate our values, share them with the world, and exemplify the principles in our actions. We could not have known how timely clarifying our commitment to leading our companies for the benefit of all our stakeholders would be ahead of the COVID-19 pandemic, and I’ve been proud to see how the private sector has stepped up — both in helping to address ongoing upheaval and uncertainty, and in continuing to evolve our businesses to be as diverse, equitable, and inclusive as possible.

Alex Gorsky

Chairman of the Board and Chief Executive Officer, Johnson & Johnson

Chair of Corporate Governance Committee, Business Roundtable

One year later – through a period of unprecedented crises – companies have demonstrated a commitment to the values embedded in the Statement.

The challenges our country has faced the past year have tested us as individuals, families, businesses and communities. Business Roundtable CEOs have been focused on the COVID-19 pandemic and, more recently, confronting the hard realities of our nation’s longstanding and deep-seated issues surrounding racial equity and justice.

One year later – through a period of unprecedented crises – companies have demonstrated a commitment to the values embedded in the Statement.

SPOTLIGHT ON

COVID-19 Response & Rebuilding Together

Business Roundtable CEOs are contributing resources, creativity and innovations to help meet unprecedented challenges facing the country. America’s largest employers are taking action to protect their employees and customers, while delivering for the nation under tough circumstances with a dedicated workforce.

Learn More About Our Covid-19 Response And Recovery Recommendations

$863+
MILLION

in monetary donations for
COVID-19-related response efforts

Faced with the pandemic, companies have prioritized the health and safety of their employees and customers. They have raised wages and delivered bonuses to frontline workers. Many are giving generously to support their communities. Auto insurers are issuing premium rebates and credits back to their customers. Energy companies have vowed to keep power on for customers who are unable to pay. Companies have retooled operations to fill critical medical supply shortages, while others are at the forefront of efforts to develop a COVID-19 vaccine. Business Roundtable CEOs have also been using their influence to press policymakers for assistance to individuals and small businesses hard-hit by the crisis.

SPOTLIGHT ON

Advancing Racial Equity & Justice

Business Roundtable CEOs are committed to doing their part to listen, learn and use collective influence and scale to advance racial justice and equal opportunity for all Americans.

Learn More About Our Work On Racial Equity And Justice

$2.26+
BILLION

in financial commitments for racial equity and justice efforts

In recent weeks, as the nation reckons with racial inequity injustices, CEOs are making new commitments to ensure diversity in their companies. They are helping local communities address economic and racial inequality, establishing multimillion-dollar scholarship programs for college-bound Black students and promising recipients full-time jobs, and committing millions of dollars to support Black and minority-owned U.S. businesses. Business Roundtable CEOs are using their collective voice to advocate for policies that affect their employees, customers, suppliers and communities, most recently, calling on Congress to find common ground on police reform.

CEO REFLECTIONS ON THE ANNIVERSARY OF THE PURPOSE OF A CORPORATION COMMITMENT

I was proud to be among the CEOs to sign the Business Roundtable Statement on the Purpose of a Corporation. I signed as a promise of accountability for a future we intend to build together. This is a journey Deloitte has been on for years. We have built our business around a commitment to make an impact that matters for clients, our people, and society. It was hard to envision then how much the world would change in just one year. The commitment made by some of our nation’s foremost business leaders to serve all of an organization’s stakeholders has become more important than ever. This is our opportunity to show that business can be a force of good by leading the way to a better, stronger, post-pandemic future.

Punit Renjen, Global CEO, Deloitte

CEO PERSPECTIVE

CBRE President & CEO Bob Sulentic on Stakeholder Collaboration to Drive Impact

CBRE created a COVID-19 Relief Fund with company and employee contributions to support employees facing hardship and local communities.