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Last month, the Business Roundtable released a new "Purpose of a Corporation" with an update emphasizing the importance of a "fundamental commitment to all of our stakeholders." So, what does this actually mean? The new statement separates itself from a previous notion that corporations' sole responsibility was to shareholders, rather than in broader service to employees, consumers, and communities. While this significant message shifts businesses' purpose toward a more expansive view of value creation, the incentives driving this shift and its tangible impact have yet to become clear. Here's the digest on dialogue around the update:
- The Aspen Institute's Business and Society program has been catalyzing dialogue around the issue of shareholder primacy for years. One month after the statement's release, see what stories are on their mind.
- Which constituencies are driving this change? Does it stem from a public, “assault on capitalism,” or something else entirely? This article from Fortune explores the motivation behind the update and examines the authenticity of this message.
- De-prioritizing shareholders require business performance models to operationally change. This article from the Wall Street Journal critiques that without reconstructing success markers, this statement is nothing but words.
- This idea is not new. Check out this op-ed by Henry Crown Fellows and founders of B-Lab - a non-profit fostering a network of corporations taking action to balance profit and purpose - on what it means to put this statement into practice.
Want to convene around how changing business practices may shape the economy? Kamalnayan Bajaj Fellow Amit Bhatia is leading the GSG Impact Summit on the "Impact Economy" November 18-20 in Santiago, Chile. Learn more.
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