The CEOs of nearly 200 of the top companies in the U.S. have redefined the purpose of a corporation, saying a stakeholder’s interests are no longer the top priority – and the new focus is to better society.
The updated definition was released on Monday by the Business Roundtable, a group that dates back to 1997 and gathers together many of America’s most influential corporate leaders including top names like J.P Morgan, Boeing, Apple, and Amazon.
The statement redefined the purpose of a corporation with social consciousness in mind, saying corporations are now committed to valuing customers, investing in employees by hiring diverse groups and compensating them fairly, dealing ethically with suppliers, protecting the environment with sustainable practices and supporting local communities.
It’s a stark contrast from the longstanding principle that companies function first and foremost to benefit shareholders and maximize their profits.
‘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 modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,’ he added.
‘This new statement better reflects the way corporations can and should operate today,’ Alex Gorsky, Chairman of the Board and Chief Executive Officer of Johnson & Johnson and Chair of the Business Roundtable Corporate Governance Committee said.