The new statement by the Business Roundtable explicitly counters this view. Friedman, the renowned University of Chicago economics professor, penned a famous 1970 New York Times essay, “The Social Responsibility Of Business Is to Increase Its Profits,” that helped launch a half century of “shareholder capitalism.” In this worldview, the business of business is business, and the sole focus of the CEO is to maximize the profits of that business. For those actively following this topic, however, it represents a very public rebuke of the Milton Friedman worldview that guides business decisions behind closed doors. On its own, this sentence is indistinguishable from the anodyne commentary that fills the annual reports of many Business Roundtable members. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” Sandwiched between the spare title and 181 signatures was a one-page declaration that ended as follows: “Each of our stakeholders is essential. On August 19 the Business Roundtable issued an open letter titled “Statement on the Purpose of a Corporation.” One of the preeminent business lobbies in the United States, the Business Roundtable (BR) includes the CEOs of leading U.S. Our findings support the views of Larry Fink and now of the Business Roundtable: purpose and profit tend to go together. This is the aim of our ongoing research initiative on corporate purpose. If given the opportunity, these self-serving leaders would divert resources to their own enrichment under the guise of “purpose.” Larry Fink, CEO of Blackrock, in his 2019 letter to CEOs disagreed with this assumption, stating in bold lettering: “Purpose is not the sole pursuit of profits but the animating force for achieving them…Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked.” This debate–whether purpose and profits work together or are fundamentally at odds with each other–can be informed by empirical research. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” The primary criticism of this kind of stakeholder capitalism is that any purpose other than shareholder profits results in lack of focus and, ultimately, corruption. Sandwiched between this spare title and 181 signatures was a one-page declaration that ended as follows: “Each of our stakeholders is essential. On August 19 th, 2019, the Business Roundtable (BR) issued a memo entitled “Statement on the Purpose of a Corporation.” The Business Roundtable, one of the most preeminent business lobbies in the United States, includes 192 CEOs of leading U.S.
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