Corporate Executives Abandon Shareholder-Oriented Ideology

One of the most powerful corporate groups in the United States has abandoned the idea of ​​the first shareholders who led capitalism for decades.

The Business Roundtable said that pursuing shareholder interests was no longer the central goal of US companies.

Companies must focus on social responsibilities as well as on profits, said the organization.

Business Roundtable members are some of the largest companies in the United States.

A statement released Monday, titled Business Roundtable redefines the goal of a company to promote "An Economy at the Service of All Americans," was signed by leaders of more than 180 US companies. These included general managers of Amazon, American Airlines and the largest US bank, JPMorgan Chase.

This statement marks the first time that the nearly 50-year-old group has stated that shareholder value is not the top priority. The primacy of shareholders was a philosophy championed by the Nobel laureate economist Milton Friedman, and was the basis of the company's raison d'être.

The new mission statement comes at a time when companies are increasingly taking a stand on issues outside the sphere of business under the pressure of activists amplified by social media and the demands of their own employees.

• "Those of us who are blessed must pay more taxes"

The declaration sets out five priorities, including commitments to invest in employees by providing fair wages and "significant benefits", supporting the communities in which they operate, and treating suppliers ethically.

"The American dream is frayed"

"The American dream is alive but in the process of crumbling," said Jamie Dimon, President and CEO of JPMorgan Chase and President of Business Roundtable.

"The major employers are investing in their workers and their communities because they know that this is the only way to succeed in the long term." These modernized principles reflect the unwavering commitment of the business community to continue to push for an economy that serves all Americans. "

Alex Gorsky, Managing Director of Johnson & Johnson, added, "This new statement better reflects how companies can and should work today, and it affirms the critical role companies can play in improving of our company when leaders are truly committed to meeting the needs of all stakeholders. "

Mary Barra, boss of General Motors, Jim Hackett of Ford and Tim Cook of Apple are also signatories.

But some critics were skeptical. Larry Summers, US Treasury Secretary under President Bill Clinton, said companies were not legally required to change their approach.

He told the Financial Times: "I am afraid that the rhetorical endorsement of the stakeholder roundtable is in part a strategy to delay necessary fiscal and regulatory reforms."