Shareholder profits will no longer be the sole priority.
A group of America’s top chief executive officers says they are revising the purpose of a corporation.
The group, who are members of the organization Business Roundtable, say corporations can no longer prioritize shareholder profits above all else. Instead, in a “modernized statement,” the organization put an emphasis on investing in employees.
“This starts with compensating them fairly and providing important benefits,” the statement says. “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.”
Tim Cook, the CEO of Apple, is one of the people who signed the statement. Shutterstock / John Gress Media Inc
The Principles of Corporate Governance has been issued by the Business Roundtable since 1978. Since 1997, the document has said the corporations exist principally to service their shareholders. The update reflects a growing awareness of income inequality and the next generation of consumers, who care deeply about corporations having an ethical mindset.
Among the signees are JPMorgan Chase CEO Jamie Dimon, who chairs the Business roundtable, Tim Cook of Apple, Dennis Muilenburg of Boeing, Brian Roberts of Comcast and Alfred Kelly Jr. of Visa.
“Just as we are committed to doing our part as corporate CEOs, we call on others to do their part as well,” the statement reads. “In particular, we urge leading investors to support companies that build long-term value by investing in their employees and communities.”