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Who is the modern shareholder? Is it only an individual who owns shares of a company? Is it a company or a person who is affected by the decisions and actions of this company? Or is it both? & Nbsp;
The Business Roundtable (BRT), & nbsp; a group of 181 executive directors, can have the answer. On Monday, the organization announced that it had redefined its "Statement on the Goals of a Company" to include the promotion of an "economy at the service of all Americans." ". & Nbsp;
"Every version of the document, published since 1997, has endorsed the principles of the primacy of shareholders – that companies exist primarily to serve shareholders," said the organization in a statement. Press release. The "corporate responsibility standard," however, has changed – and now requires companies to benefit from "all stakeholders," including customers, employees, suppliers, and communities. From a modern perspective, members of this highly diversified group could, in some respects, all be considered "shareholders" to some degree. & Nbsp;
"The American dream is alive but in a state of fray," said Jamie Dimon, president and CEO of JPMorgan Chase & amp; Co. and President of BRT. "The major employers are investing in their workers and their communities because they know that it's the only way to succeed in the long run."
Leaders should adopt Dimon's new way of thinking, but they should not neglect the last part of his statement. Creating a socially responsible company, as Patagonia does, is the "right" thing to do. it is also the key to current and future prosperity. According to BRT's new statement of intent, here are three steps for executives who want to grow their business while serving all types of shareholders. & Nbsp;
1. Develop ethical supply chains
Although media speak less often about suppliers than employees or customers, BRT understands their importance. The CEOs stated that they "are dedicated to serving as good partners to other businesses, large and small, that help us fulfill our missions. "Supply chains also count for the public: Nielsen found that many consumers around the world were willing to "pay above-average prices" for products that meet high quality and safety standards (49%) and products made from sustainable materials (38%).
As several authors have written in Supply Chain Management Review: Supply chains are "the best ethical choice, whether it's an organization's sustainability efforts and carbon footprint or how it treats its suppliers and suppliers." communities in which it operates. "& Nbsp;
Patagonia has long been touted as a champion of sustainable business practices, and its supply chain is no exception. It strives to protect migrant workers, to ensure good working conditions in its factories and to choose suppliers who have reduced their impact on the environment. It also offers a range of certified fair trade items. Many believe that Patagonia's commitment to the social impact of businesses has helped it become a retail giant that has generated $ 1 billion turnover in 2017. "Doing a good job for the planet", Rose Marcario, CEO m said, "Creates new markets and makes us" more money. "
2. Invest in employees
Improving employee experience is another important consideration for executives who want to align their organizations with this modern vision of corporate responsibility. As the BRT suggests, this may involve increasing pay and benefits, or expanding access to training and education that reskill employees for the future. Investing in employees is also not a non-return expense: it generally helps to make money by helping companies attract the best talent, reduce staff turnover, improve productivity and prepare more for the sector. 4.0. & Nbsp;
Eric Garten, co-author of Time, talent, energy, presented the results of the research in Harvard business review that the companies that invest the most in their employees release "more than 40% of their productivity". Employee satisfaction is also often linked to an improvement in financial performance: Glass door, a Norwich Business School Study found that "a portfolio of companies with high employee satisfaction on Glassdoor significantly outperformed the overall stock market, generating additional returns of 1.35% above market returns." & nbsp;
A company that adheres to this philosophy is managed by Q, a desktop management platform. While its competitors hire cleaners and maintenance staff as contract employees, Managed by Q hires them as employees who receive paid health insurance, a 401 (k), a paid leave and stock options. The New York Times Dan Teran, CEO of the company, said that "most US companies, including fast-growing start-ups like Uber, have confused short-term gains with long-term value, reducing the share of revenues going to workers that will pervertly hurt their results. "Teran took the opposite approach – & nbsp; and earlier this year, the $ 249 million WeWork acquired the company for an undisclosed amount. & nbsp;
3. Support local communities
In addition to serving its employees and suppliers, BRT's new statement states that companies must also support the communities and the environment in which they work. This new outlook may be the result of growing consumer demand, with Cone Communications reporting that 63% of Americans want companies to "lead to social and environmental change". & nbsp; & nbsp;
"The mere fact of dealing with the problems related to the imprint of the company will no longer reduce it in the eyes of consumers", m said Whitney Dailey, Director of Marketing at Cone. "& Lsqb; corporate social responsibility & rsqb; is not a fashion, a trend or a "pleasure to have". It is a business imperative that must be authentic and seamlessly integrated into the brand's value proposition. "
Take Quicken Loans, which aims to revitalize and serve the city of Detroit through its Community Fund. It supports critical areas such as entrepreneurship, education, employment and housing stability – & nbsp; in 2019, it invested $ 1.3 million to help close to 600 tenants in Detroit stay in their homes. The company also offers all its employees unlimited paid volunteer time. "Every day, our team members volunteer across the country, from teaching coding techniques to Detroit public school students to planting food in urban gardens. or serving meals to the hungry, "said General Manager Jay Farner. People. "We truly believe that everything we do makes a difference."
The remaining commitments included in BRT's renewed intent statement are more familiar than others: "create value for our clients" and "generate long-term shareholder value". Any leader who already targets these two goals should note that his efforts will be strengthened by expanding the scope of their activities to serve all Americans, as was the case with Patagonia. "CEOs are working to generate profits and value shareholders, but better-run companies are doing more," m said Tricia Griffith, President and CEO of Progressive Corporation. "They give priority to the customer and invest in their employees and their communities. Ultimately, this is the most promising way to create long-term value. "& Nbsp;
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(Photo by Robert Alexander / Getty Images)
Getty Images
Who is the modern shareholder? Is it only an individual who owns shares of a company? Is it a company or a person who is affected by the decisions and actions of this company? Or is it both?
The Business Roundtable (BRT), a group of 181 executive directors, could have the answer. On Monday, the organization announced that it had redefined its "Statement on the Purpose of a Company" in order to include the promotion of an "economics-serving service." all Americans ".
"Each version of the document, published since 1997, has endorsed the principles of the primacy of shareholders, namely that companies exist primarily to serve shareholders," said the organization in a press release. The "corporate responsibility standard," however, has changed – and now requires companies to benefit from "all stakeholders," including customers, employees, suppliers, and communities. From a modern perspective, members of this highly diversified group could, in some respects, all be considered "shareholders" to some degree.
"The American dream is alive but it is eroding," said Jamie Dimon, President and CEO of JPMorgan Chase & Co. and Chairman of BRT. "The major employers are investing in their workers and their communities because they know that it's the only way to succeed in the long run."
Leaders should adopt Dimon's new way of thinking, but they should not neglect the last part of his statement. Creating a socially responsible company, as Patagonia does, is the "right" thing to do. it is also the key to current and future prosperity. Based on BRT's new statement of intent, here are three steps for executives who wish to grow their business while serving all types of shareholders.
1. Develop ethical supply chains
Although media speak less often about suppliers than employees or customers, BRT understands their importance. The CEOs stated that they "are dedicated to serving as good partners to other companies, big and small, that help us fulfill our missions." Channels are also important to the public: Nielsen discovered that many consumers around the world were willing to "pay above-average prices" for products that meet high quality and safety standards (49%) and products. made from durable materials (38%).
As several authors have written in Supply Chain Management Review: "Supply chains are" the best choice in terms of ethics, what about sustainability efforts and the carbon footprint of an organization or how it treats its suppliers and the communities in which it does business.
Patagonia has long been recognized as a champion of sustainable business practices, and its supply chain is no exception. It strives to protect migrant workers, to ensure good working conditions in its factories and to choose suppliers who have reduced their impact on the environment. It also offers a range of certified fair trade items. Many believe that Patagonia's commitment to the social impact of businesses has helped it become a retail giant with $ 1 billion in sales in 2017. " good work for the planet, "said CEO Rose Marcario," creates new markets and allows [us] more money. "
2. Invest in employees
Improving employee experience is another important consideration for executives who want to align their organizations with this modern vision of corporate responsibility. As BRT says, this may involve an increase in pay and benefits, or expanded access to training and education allowing employees to requalify in the future. Investing in employees is also a non-return expense: it is often cost-effective in helping companies attract the best talent, reduce staff turnover, improve productivity, and better prepare for Sector 4.0.
Eric Garten, co-author of Time, talent, energy, presented research findings in the Harvard Business Review that companies that invest the most in their employees generate "40% power output." Employee satisfaction is often correlated with improved financial performance: According to Glassdoor, a Norwich Business School study found that "a portfolio of companies with high employee satisfaction on Glassdoor significantly outperformed the market. global market, generating additional returns of 1.35% higher than those of the market ".
A company that adheres to this philosophy is managed by Q, a desktop management platform. While its competitors hire cleaners and maintenance staff as contract employees, Managed by Q hires them as employees who receive paid health insurance, a 401 (k), a paid leave and stock options. According to the New York Times, Dan Teran, CEO of the company, believes that "most US companies, including young, fast-growing companies like Uber, have confused short-term gains with long-term value, thereby reducing the share of income workers have perverse consequences on their results. Teran took the opposite approach: Earlier this year, the $ 249 million business had been acquired by WeWork for an undisclosed amount.
3. Support local communities
In addition to serving its employees and suppliers, BRT's new statement states that companies must also support the communities and the environment in which they work. This new perspective may be the result of growing consumer demand. Cone Communications reported that 63% of Americans wanted companies to "drive social and environmental change."
"Just dealing with the problems of the commercial footprint will no longer reduce it to consumers," said Whitney Dailey, Marketing Director at Cone. "[Corporate social responsibility] is not a fashion, a trend or a "pleasure to have". It is a business imperative that must be authentic and seamlessly integrated into the brand's value proposition. "
Take Quicken Loans, which aims to revitalize and serve the city of Detroit through its community fund. It supports critical areas such as entrepreneurship, education, employment and housing stability. In 2019, he invested $ 1.3 million to help nearly 600 Detroit tenants stay at home. The company also offers all its employees unlimited paid volunteer time. "Every day, our team volunteers across the country, from teaching coding techniques to Detroit public school students to planting food in urban gardens to serve meals to the hungry, "said General Manager Jay Farner. "We truly believe that everything we do makes a difference."
The remaining commitments included in BRT's renewed intent statement are more familiar than others: "create value for our clients" and "generate long-term shareholder value". Any leader who already targets these two goals should note that his efforts will be strengthened by expanding the scope of their activities to serve all Americans, as was the case with Patagonia. "CEOs are working to generate profits and shareholder value, but the best-run companies are doing more," said Tricia Griffith, President and CEO of Progressive Corporation. "They give priority to the customer and invest in their employees and their communities. Ultimately, this is the most promising way to create long-term value. "