Voluntary virtue is never enough: The Business Roundtable’s statement is flawed, vague and patronising
The Business Roundtable’s statement on the purpose of a corporation is a communications blunder, argues Neil Shoebridge. It sets out lofty goals, but no path to actually achieving them.
Last week, the Business Roundtable, an association of CEOs of some of the biggest companies in the US, issued a ‘statement on the purpose of a corporation’. The 300-word statement was a pledge by the 181 CEOs who signed it to not only focus on the interests of their shareholders, but those of ‘all’ stakeholders of their businesses. Broadly, that means looking after their employees, their community, protecting the environment and dealing fairly and ethically with their suppliers.
Makes sense right? Big business knows people are increasingly angry – and vocal –about how it treats employees, the harm it is doing to the environment, and myriad other issues. Signing a statement that says shareholder returns are not the only priority seemed like a good idea. It wasn’t.
The problem is that, as a piece of strategic communication, the statement is deeply flawed. It is vague. It doesn’t explain how its ideals will be turned into action. It is, in parts, patronising. It will be seen as corporate grandstanding, because it is.
The purpose of a corporation? To make money for shareholders. Anything else is hot air.
If business is doing all the bad things Neil Shoebridge says, and those things are significant enough to alienate the community, then business will go out of business. However if businesses are only failing to live up to the onerous demands of the schoolyard bullies of the 21st century, the Leftist agitators who work from the playbook of 1930’s Brownshirts, then businesses will find themselves more on the side of the community, than their detractors. The squeaky wheels do not always get the oil.