By Mark Peterson
Recently the Business Round Table, one of the most powerful lobbying groups for Corporate America, decided to finally join the sustainability party – well at least kind of. The group includes some of the world’s most influential business leaders such as Amazon’s Jeff Bezos and Apple’s Tim Cook. In the year 2019 they seem to have come to the realization that maybe a corporation actually has a responsibility to more than just their stockholders. If upon reading this, you find yourself a bit skeptical you’re not alone. Certainly, companies can change their outlook and their ways of doing business, but after years of so many other businesses and corporations finding ways to do conduct business in a sustainable fashion, the fact that the most profitable companies in the world are just now codifying this into their business plans just rings hollow.
For over 40 years the Business Round Table has operated under the paradigm where shareholders were of the utmost importance and sacrosanct. Colored by the economic theories of Milton Freidman who in his 2007 book Corporate Ethics and Corporate Governance wrote “The businessmen believe that they are defending free enterprise when they declaim that business is not concerned “merely” with profit but also with promoting desirable “social” ends; that business has a “social conscience” and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact, they are — or would be if they or anyone else took them seriously -preaching pure and unadulterated socialism.”
As recently as 1997 the Business Round Table doubled down and issued their, Statement of the Purpose of the Corporation, which states, “that “the paramount duty of management and of boards of directors is to the corporation’s stockholders.” This certainly lead me to ask what spurred this change and why now. I don’t have those answers for certain and I’m not sure we’ll ever know but I can’t help but think it all a ploy. For years corporations have enriched shareholders at the expense of the environment, worker health and safety, all while trampling local economies and abandoning communities for the next best tax incentive deal in a new state or country.
It is not necessarily a bad thing that these behemoths of industry have realized and pledged to deal “fairly and ethically with suppliers,” “deliver value” to customers and “protect the environment by embracing sustainable practices.” However, this shift certainly seems to be more corporate self-servance than altruistic. In fact the Business Round Table’s Chairman and JP Morgan Chase Chief Executive Jamie Dimon said, ““The American dream is alive, but fraying…Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.” These words coming from a business person who made his estimated personal net worth of $1.3 billion USD off the “old paradigm” of resource exploitation, cheap labor and hostile corporate takeovers rub me the wrong way.
I don’t have an MBA and maybe I’m missing something but what I find ironic is, operating a business in a sustainable fashion, caring about your employees and your community isn’t a new way of doing business. Whatcom County is full of local businesses who have been living these values from their inception. These and other like-minded businesses found a way to stay true to their values and find success and profit in spite of market forces perpetuated by the very same Business Round Table who now has had a change of heart. How long this change of heart will last, I’m not sure anyone really knows. Shareholders are already starting to revolt.
So, Business Round Table, sure come on in, join the party even if you are 40 years late – the least you can do is put your money where your mouth is, buck up, go big and buy the next sustainability round (or next 100). You may be late to this party but l hope you party sustainably and stay for the long term.