Did 181 CEOs Really Commit to Make Stock Value Secondary?

The truth behind the hype from the Business Roundtable

The following is a transcript of a special episode released today by the podcast This Human Business. A list of the 181 CEOs who signed the Business Roundtable statement, along with names of their corporations, is available along with the podcast.

This morning, Americans woke up to a surprising headline from the Washington Post: “Group of top CEOs says maximizing shareholder profits no longer can be the primary goal of corporations”. The story referred to a document signed by 181 CEOs called the Statement on the Purpose of a Corporation. In a press release accompanying the statement, the Business Roundtable claims that the statement “redefines the purpose of a corporation”.

This sounds promising. If these representations are accurate, the Business Roundtable document is a significant step forward in making business more human.

Are these depictions of the document really accurate, though? Is the Washington Post correct to say that the document makes shareholder profit no longer a primary goal of corporations?

Let’s not speculate. Let’s read the statement itself. It’s not long.

Statement on the Purpose of a Corporation

Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.

Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.

While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:

Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.

Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.

Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.

August 2019

That’s all the statement says.

Let’s pay close attention to what it says, and what it does not say.

Did you hear anything about stockholder profit no longer being the primary goal of corporations? No. The document says nothing of the sort.

What this statement actually says is that the signatories recognize that there are other things that are important, in addition to stockholder profit. The document never says, or even implies, that these other things should be more important than shareholder profit. It never even addresses the scandal of outlandishly excessive CEO pay.

Let’s be crystal clear about this: There is nothing at all in the Statement on the Purpose of a Corporation that removes shareholder profit from its place of primary importance in corporate structure.

What’s more, there are no specific commitments in the Business Roundtable document to do anything to promote the interests of anyone other than corporate stockholders. There are only vague suggestions of abstract ideas. It would be bad enough if the Statement on the Purpose of a Corporation had no enforcement mechanisms for proposed reforms, but the actual condition of the document is even worse than that. It contains no substance to be enforced. The document contains zero reforms.

The Statement on the Purpose of a Corporation reads like a public relations gimmick. This document from the Business Roundtable appears to be nothing more than just one more instance of purpose-washing: The use of empty statements of lofty business purpose in an effort to distract from profoundly unethical business practices.

The Washington Post headline is profoundly misleading, creating a false impression of corporate commitment to reform where none exists. However, a number of American news organizations are imitating the Washington Post’s misleading story, because the Post remains a leading journalistic company in the United States.

Is it a coincidence that the Washington Post is the personal property of one of the CEO signatories of the Business Roundtable document, Jeff Bezos, who also owns the Amazon empire? We can’t know for sure whether Bezos directed the puff piece to be written by the Washington Post, or whether staff at the Washington Post took it on their own initiative to write an article that creates a false positive impression of their boss and the business organization to which he belongs.


Amazon is a perfect example of a company that talks about high ideals even as it commits terrible abuses. The Business roundtable document talks about valuing employees as stakeholders, but Amazon has become infamous for the way it overworks its employees to the point of mental and physical illness, while providing ridiculously low pay to employees and contractors below the executive level. Amazon develops and implements employee tracking software that treats human beings like machines in the pursuit of maximum efficiency, regardless of the personal consequences, and deploys other software to conduct unauthorized surveillance against its customers, all in the pursuit of profit for stockholders and top executives.

Jeff Bezos may have signed his name to a statement pledging to support human communities, but as anyone who lived in Seattle before, during, and after the Amazon invasion, the corporation Bezos runs extracts maximum value from the communities in which it works while providing little benefit in return. Amazon’s presence has made Seattle an unaffordable place to live. On a national level, Amazon has used public resources while paying extremely low levels of taxes, and sometimes no taxes at all.

The Business Roundtable uses pretty words to talk about environmental sustainability, but a large number of the signatories are chief executives at fossil fuels corporations: Exxon Mobil, BP, Chevron, Marathon Oil, ConocoPhillips, NRG, Duke Energy, Bechtel, and on and on. Get the picture? These businesses are not “embracing sustainable practices”. They’re selling crude oil and other fossil fuels, pumping massive amounts of deadly pollutants into the atmosphere, and releasing greenhouse gases at a planet killing pace.

I think we should all agree that “supporting the communities in which we work” should begin with not killing people. Yet, among the signatories of the Business Roundtable statement are international weapons merchants: Raytheon, Northrop Grumman, and Lockheed Martin. They profit, and not just from sales to the American military, where they regularly cheat the American taxpayer by routinely providing weapons systems that don’t work at costs that are far above what was promised. No, these corporations make huge amounts of money selling weapons to governments who are committed opponents of human freedom.

“Lockheed Martin has been a committed partner to the Kingdom of Saudi Arabia,” the corporation brags. Even as the kingdom wages war, brutally suppresses dissent, oppresses women, abuses workers, and murders journalists, Lockheed Martin profits by selling weapons to Saudi Arabia. That is not what being a good member of the global community looks like.

While we’re on the subject of guns, there are a few issues with Walmart, another signatory of the Business Roundtable statement. Walmart is one of the top sellers of guns in the United States. After a gunman entered a Walmart in El Paso and slaughtered a huge number of people there, Walmart took down some video game displays in its stores, claiming that this was somehow an adequate response. Walmart didn’t stop selling guns for even one day after the attack. How is running guns supporting the community?

Walmart’s ethical problems aren’t only a matter of deadly weapons, of course. WalMart pays its employees the lowest wages that are legally allowed. WalMart pioneered the race to the bottom among suppliers, too. The Business Roundtable document states that its signatories believe in treating suppliers fairly, but anyone who has worked as a supplier to WalMart knows that the corporation places one priority above everything else: Low prices. WalMart offers suppliers access to a huge number of stores, but at a terrible cost: Low prices by any means necessary, forcing its suppliers to take part in a long chain of abusive practices, placing extreme pressure on any company that touches WalMart’s business in any way to cut corners at human expense.

There are 181 CEO signatories to the Business Roundtable Statement on the Purpose of a Corporation, and I don’t have time to point out the unethical practices of all of the companies they represent. I could go on for hours, but I think you get the point. The actions of these corporations don’t match the words of their executives.

Business leaders love to come together in meetings where they talk about doing the right thing… before they head back to their offices and direct their corporations to continue with the same abuses as before.

I want to see businesses genuinely reform. That’s why I began this podcast, and it’s why I do the work I do. My job is to reconnect people in business to the opportunity to realize high ideals that lay dormant within their own work.

I have, however, been doing this work for long enough to know the difference between pretty words and action. I’ve been consulting for a quarter of a century, and I’ve learned to identify the turns of phrase that people in business use to create the appearance of a newly found moral compass while actually refraining from a commitment to go in any other direction than the path of easy profit.

Insincere statements such as the Business Roundtable’s Statement on the Purpose of a Corporation don’t merely fail to deliver the progress that we need. They make it more difficult for sincere reformers in business to succeed. The more business leaders adopt obviously false poses of benevolence, the less likely anyone is to believe that any genuine reformers in business exist.

True business reformers are rare, but they do exist. I have met a few in my time, hidden amongst the crowds of hucksters. Their work is undermined by the cynical maneuvers of groups like the Business Roundtable.

Maybe I’m wrong. Perhaps the corporations represented at the Business Roundtable really are going to change their ways, end their ruthless exploitation of vulnerable human beings, and stop turning our planet into an unlivable hot toxic dump.

The records of the corporations whose CEOs signed the Business Roundtable document strongly indicates that they can’t be trusted. They don’t deserve the benefit of the doubt.

If they are really changing their ways, these powerful businesses need prove it through sustained, significant, concrete action.

These corporations have the power to make the world a better place.

Let’s pay attention to what they actually do, rather than to their flowery promises.

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