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You can be cynical about this, and a healthy amount of skepticism is warranted given the authorship. That said, it would be interesting (healthy?) to discuss/d

You can be cynical about this, and a healthy amount of skepticism is warranted given the authorship. That said, it would be interesting (healthy?) to discuss/debate the merits of the actual statements: * Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations. * Investing in our employees. This starts with compensating them fairly and providing important benefits. 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. * Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions. * Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses. * Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders. Curious where people thing they are wrong or incomplete.

rectang 7y ago
> Curious where people thing they are wrong or incomplete. Enforcement.
- rgacote 7y ago
  And case law.
  - jforman 7y ago
    Case law is on the side of corporations having no generalized duty to maximize profit on a day-to-day basis, for what it's worth. Corporations can exist for any number of reasons and the fiduciary duty is much more limited than people generally expect. My wife wrote a law journal article on this but it isn't digitized unfortunately.
tomatocracy 7y ago
This statement is being billed as 'demoting shareholder value' but I don't think that's what it is. These are all very good ways to deliver shareholder value, especially in mature markets. In other words it's telling you how they plan to reach that goal, not that they have suddenly changed their goals.
pessimizer 7y ago
They're incomplete in that all of the statements lack any falsifiable content. They're vapid, nonspecific, and obvious. This is clearly a PR exercise, possibly with the hope of publicly allying with one of the Democratic primary contenders, or a strong potential Trump challenger. Statements about planned obsolescence, disposable plastic packaging, repairability or specific forms of rent seeking are examples of the kinds of statements that would be serious.
- jeffrallen 7y ago
  Or specific maximum CEO to lowest salary ratio targets.
- kingsolmn 7y ago
  > This is clearly a PR exercise I hope this isn't the case, but that's what kept repeating in my head while I was reading it. If this is an honest sentiment and the start of a change in the way business runs then we'll see that in short order. But, in the end, it all comes down to making money and not "the greater good".
RockIslandLine 7y ago
"This starts with compensating them fairly and providing important benefits." So 51% of corporate profits are reserved for the employee bonus pool? And all employees are eligible for said bonuses? It's not hard to come up with examples of where this fails. Don't give me aspirational pie in the sky. Give me operational policy.
- travisoneill1 7y ago
  This. Whenever someone calls for "fairness" without a formula to calculate I immediately disregard.
- wormseed 7y ago
  Should 51% of losses come out of employees pockets?
  - TheOtherHobbes 7y ago
    Employees fired during a townturn will certainly have emptier pockets than they used to.
  - throwaway2048 7y ago
    losing $1000 hurts a huge amount of people more than a billionaire losing a billion does. How many billionaires are homeless after their ventures implode?
    - FussyZeus 7y ago
      > How many billionaires are homeless after their ventures implode? Has this happened in recent memory, at all? Because when I was growing up and getting the pro-capitalist America view of things on the regular, I vividly recall that capitalism is all about your success individually, that you risk it all and if you lose, you lose. Even Elizabeth Holmes, an entrepreneur* who's business not only failed, massively, not only caused a man's suicide, not only lost fortunes both public and private, all without ever producing a SINGLE FUNCTIONING OR USABLE PRODUCT, she left a rich woman if I'm not mistaken. *I was gonna quote that word here but no, I'm not going to because the mythical status of these people in American society is a joke. Anybody can be an entrepreneur. There are no qualifications and no requirements and you cannot break someone's faith in the "mythical rich 1%" than having them work for one, directly for a year, and see how maladjusted, how emotionally vulnerable, and how utterly dependent they are on subordinates for even trivial tasks.
analogwzrd 7y ago
If they're serious about decreasing the importance of shareholder value, then they'll re-design executive and management compensation to be tied less to the company stock price.
- phamilton 7y ago
  I wonder if there's a way to tie the other pieces into shareholder value. ESPP is an easy way to let employees see upside when the stock does well. How could we tie serving customers to stock value? Being good partners? It may be that we can't, and therefore stock price is a bad metric focus on.
  - einhverfr 7y ago
    Indeed the rise of ESPP's due to ERISA are why I consider Nixon the closest President we've had to being actually Socialist.
  - dhimes 7y ago
    Personally I like the idea of profit-sharing.
- leot 7y ago
  "Shareholder value" misses at least two critical bits of context: 1. over what timescale? 2. at what level of risk? As soon as they are incorporated, it's obvious that firms have both more leeway and more responsibility to take care of a wider range of stakeholders.
acjohnson55 7y ago
"Dealing fairly and ethically with our suppliers" omits the responsibility to choose suppliers ethically, as well. The supply chain creates plausible deniability for negative externalities for the consumer, the business they directly interact with, and middlemen down the supply chain. This is one of the biggest problems of global capitalism, today. There's very little accountability.
- kingsolmn 7y ago
  > "Dealing fairly and ethically with our suppliers" omits the responsibility to choose suppliers ethically, as well. Great point! But, if this document is a starting point in Ernest, then as long as this is followed then it's a good start. The next iteration should, then, include a strong commitment to objective fairness in the supplier selection process. Whether or not that actually happens will depend on the commitment to remove corruption in the process.
0xDEFC0DE 7y ago
>Investing in our employees This should also mean cutting down on abusive or low-paid contractors, if they exist, and converting them to employees.
mempko 7y ago
This statement was more of a signal to the American people. It's up to us to vote and make the policy decisions to make this possible. As Noam Chomsky often says, even if a CEO wanted to do the right thing, they can't because of the structural constraints. They would be fired so fast. So it's up to us to change those constraints.
- hos234 7y ago
  He is correct. I don't know why you are getting downvoted.
- excursionist 7y ago
  That's not quite what Chomsky says... > The concentration of wealth and enhancement of corporate power translate automatically to decline of democracy. Research in academic political science has revealed that a large majority of voters are literally disenfranchised, in that their own representatives pay no attention to their wishes but listen to the voices of the donor class. It is furthermore well established that elections are pretty much bought: electability, hence policy, is predictable with remarkable precision from the single variable of campaign spending, both for the executive and Congress. https://truthout.org/articles/noam-chomsky-moral-depravity-defines-us-politics/ https://truthout.org/articles/noam-chomsky-moral-depravity-d... Most Americans are politically disenfranchised and political decisions are often made counter to what the majority want and vote for, in favour of elite and corporate interests. It's pretty amazing to claim corporations are signalling some kind of unity and/or support of the general public based on this PR piece, while their money, lobbying, and power are doing the exact opposite.
JustSomeNobody 7y ago
> Investing in our employees. This starts with compensating them fairly and providing important benefits. Every CEO who signed this was nodding, thinking, "we do that already."
vasilipupkin 7y ago
Soviet Union had show trials and U.S. has show letters. The legal purpose of a corporation is to generate returns for shareholders. If training employees and helping customers advances that goal, then corporations should do it. Otherwise - no. Goes without saying that corporations should maximize shareholder value using legal means only.
- Ididntdothis 7y ago
  As far as I know the purpose of a corporation is to conduct lawful business. I don’t believe the law says anything about shareholder returns.
  - vikramkr 7y ago
    The law definitely doesn't, otherwise it would be illegal to do things like donate to charity as a corporation. If all shareholders get together and vote unanimously to take all the money in the corporation and give it away, then they can totally do that. If the law mandated maximizing shareholder returns then shareholders would no longer be free to instruct the entity they own to do what they want it to if it conflicts with increasing profits
    - vasilipupkin 7y ago
      Ok, you are nitpicking. The legal purpose is to advance the interests of shareholders. Sure, shareholders can give away all the money and earn zero returns ( presumably they would register a non profit if they wanted to do that ) but it would be illegal to do something that shareholders didn’t agree to. Did shareholders of the signatories agree to forego profits in order to make customers happy ? Of course not.
      - vikramkr 7y ago
        I'm not nitpicking, and the legal purpose of a company is not to deliver shareholder returns. IIRC, most company incorporation specify the legal purpose of the corporation to be to do the business that the corporation is made to do. Here's the excerpt from my certificate of incorporation: "The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. " And the same agreement vests in the officers the ability to do whatever is necessary to further that purpose. You obviously can't go against the results of a direct shareholder vote but officers have enormous leeway. If they decide to forgo profits in order to make customers happy, whether or not that is meant to drive long term growth, that is completely legal as long as there are no conflicts of interest.
OscarCunningham 7y ago
In a circumstance where bosses are forced to tradeoff between these goals, how should they choose?
- anticensor 7y ago
  Preservation of company (including the ownership structure and charters) > Profit (overall from institution to dissolution) > Other benefits
  - OscarCunningham 7y ago
    Surely there need to be weightings? If any amount of profit is better than any amount of other benefits, how is the situation different to now?
    - anticensor 7y ago
      Preserving profitability with unchanging charter, business model, and ownership structure (including approportion of shares) is harder than maximising profit.
mytailorisrich 7y ago
In that list only the last point, delivering value to shareholders, is a purpose of a corporation. A purpose is not the same as something in its interest or that a "nice" corporation might do. For example, investing in its employees might be in the corporation's interest in order to fulfill its purpose. But a corporation is not created in order to invest in its employees... This is a PR exercise, as already commented by someone else.
- jopsen 7y ago
  > This is a PR exercise, ... Quite possibly, but the fact that it is necessary, suggest that businesses are recognizing that there is a problem. Words is a first step.
  - throwaway2048 7y ago
    If these corporations wanted to make things better, they could, today, instead we get a bunch of completely meaningless back patting, and zero action. Words without action don't mean shit.
khawkins 7y ago
Most of this is obviously desirable, but the explicit message is "we commit to doing good", with the implicit message being "we can be trusted to do good". The mechanisms which guarantee these promises are wholly unaddressed. For example, there's no mention of competition or its belief that healthy, fair competition brings about these things. In fact, it's distinctly anti-competitive in the fact that the leadership of all of these companies are behind closed doors coordinating a message like this. Instead of going to a fancy conference and chumming it up with each other, then patting yourselves on the back about what great people you are, lead by example and hold the others to task. Make the living conditions of your employees better and then attack your competitor for not keeping up. Quit using the latest cultural cause as a marketing stunt and focus on making a better world for your customers and employees. The fact that you wrapped your corporate logo in a pride flag for a month doesn't do a thing to help your employee whose sanity is tested every day by their crappy manager, whether they're gay or not. And figure out how to still make all this profitable in the long run.
- ditonal 7y ago
  I couldn't agree more strongly. I tend to get harshly downvoted when I bring up Google on Hacker News (since it employs a disproportionate amount of Bay Area engineers that hang out here and then get defensive about it), but no other company did I see quite the disconnect between what they SAY they aspire to and how they ACT. Google has built an incredibly strong PR brand on being the "good guys", a "not a conventional corporation", "don't be evil", etc. But in a way it's far more dangerous. At least we know what Goldman Sachs is about, making money, the employees there largely know it, the world around them knows it, people know to be on guard when dealing with Goldman because you know what their motives are. With Google, having worked in NYC with finance companies and spent many years at Google, people are Google are as obsessed with money, success, and prestige as any finance employee. But they SAY they are about making the world a better place, responsibility etc. Where this leads is not, Google doesn't do bad things, but the much scarier, they do wrong things but saying they can't be wrong because Google is the one doing it, and Google is supposedly good! Taking a page from Nixon, "when the president does it, it's not illegal." This came to a head during the Maven debate over using Tensorflow to build auto-aim killbots. The most common ethical defense amongst employees was "well, if we don't do it, Amazon will do it, and that would be worse! Because we're Google, and we're the good guys." Now if a crack dealer said, it's alright for me to sell dangerous narcotics to these children and addicts, because if I don't do it, someone else will. And that person could be even worse! Would ANYONE accept that argument as ethically coherent? Of course not, yet these otherwise very intelligent Google employees seemingly swallowed up Google's absurd logic without thinking. You become the good guy by NOT doing the bad things, not by doing the bad things while claiming it's alright because you SAID you're the good guys. Now, to pre-empt people accusing me of derailing, I'm not because this is extremely relevant to the original article being discussed here. This is banks leaders like Jamie Dimon following Google's lead. You don't have to actually take any REAL moral stand, you don't have to make any real ethical decisions, all you have to do is TALK about it a lot. Control the message. It's dishonest and it's hypocritical but it's worked out very well for Google. Compare Google to Uber. If you just look at the facts, between the Kelly Ellis accusations, the Andy Rubin thing, many more examples, Google's sexual harassment FACTS are actually WAY worse than what Uber was accused of. Yet Uber now has this awful reputation for being terrible to women while Google gets way less flak in both the tech community and the broader world - why? All because Larry and Sergey played the PR game way better than TK, they were the cool hip burners who cared about progressive stuff, while really they run their companies with the exact same corporate malfeasance, profit at any cost strategy of any NYC financial institution. Bottom line, we need to hold companies accountable with ACTIONS, and if they give us WORDS instead of ACTIONS we should be MORE critical, not drop our guard and be LESS critical.
pdonis 7y ago
> Curious where people thing they are wrong or incomplete. The whole premise of the article is wrong. The premise is that the problem with corporations is that they only consider the interests of their shareholders. That's wrong. The actual problem with corporations is that corporate governance has broken down, so that corporations no longer consider the interests of all their shareholders, and the shareholders themselves are no longer involved in determining the corporation's goals. Most shareholders now, in terms of percentage of voting stock ownership, are not individuals but mutual funds, who don't care what the corporation's goals are as long as its stock price and dividends meet targets; and CEOs, even if their share holdings are small as a percentage of the total, can easily get themselves special compensation packages and golden parachutes regardless of whether they improve the corporation's situation or not.
- pmiller2 7y ago
  > Most shareholders now, in terms of percentage of voting stock ownership, are not individuals but mutual funds, who don't care what the corporation's goals are as long as its stock price and dividends meet targets; and CEOs, even if their share holdings are small as a percentage of the total, can easily get themselves special compensation packages and golden parachutes regardless of whether they improve the corporation's situation or not. You stopped just short of what I think is the real issue here. Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. There’s literally an episode of Black Mirror about this. They “privatize profits and socialize costs,” as the saying goes, and they don’t blink at doing things that may be illegal, because the profit reward is so strong. This is the kind of thinking that had oil companies suppressing climate change research in the 80s and tobacco companies suppressing lung cancer research in the 40s and 50s. A feel good statement by a couple hundred CEOs isn’t going to do anything about that.
  - pdonis 7y ago
    > Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. I don't think "whatever is profitable" pins it down enough. They do what is profitable on a short time scale. They don't do what is profitable over long time scales like 30 or 50 or 100 years. If they did, they would not be able to get away with, for example, privatizing profits and socializing costs, because what enables them to do that is that the profits show up in the short term but the costs only show up in the long term. Back when corporate governance worked, shareholders were mostly individuals and they typically held shares on a long time horizon. That created obvious incentives to judge corporations by profits on a long time horizon. But now, most shareholders are mutual funds who judge individual corporations on a short time horizon--if the corporations don't make their numbers, the mutual fund trades their stock away. That means corporations have no incentive now to look at profits on a long time horizon--even though their shareholders do.
em3rgent0rdr 7y ago
They do have merit...but we already have a legal term for such an entity that is for-profit but also intends to benefit society: https://en.wikipedia.org/wiki/Benefit_corporation https://en.wikipedia.org/wiki/Benefit_corporation
aantix 7y ago
“Fairly” - implying that they could pay more, but don’t? Lots of businesses operate on razor thin margins, but still serve if a purpose. What should be their course of action?
nerdponx 7y ago
Until I see "abatement of lobbying" I won't believe any of this has good intentions.
kemitchell 7y ago
The statements themselves have no merit. They are so nebulous, so unnaturally and uniformly connotation-positive, that they defy measurement, and therefore accountability. They may be useful for virtue signalling. But none of the virtues signaled are particularly controversial. They may be useful for developing more enlightened self-interest among investors and the intermediaries that vote their shares. But they change nothing about the governance structure of the firms. Stockholders elect directors appoint officers who run the companies. Many of us have seen corporate "mission statements" or "core values" or "company principles" changed with great fanfare and no discernible effect on substantive corporate behavior. This is even fuzzier than that. This release announces a change to a kind of generalization of many corporate mission statements. Fuzzy in, fuzzier out. In the end, I have to be suspicious. The only meaningful signal I read here is an open, united affront to the principle of simple shareholder primacy. In the balance of power, that behooves executives, who experience simple shareholder primacy as an accountable constraint on their discretion. Business Roundtable is an interest group for executives. It is not an interest group for customers, workers, suppliers, communities, shareholders, or their representatives. It may choose to try and leverage customers, workers, suppliers, communities, and their representatives against shareholders. That has to be a far more delicate process when you're not the owner of a special class of stock that assures you stay in power.
dv_dt 7y ago
One thing that comes to main is taht the companies should, for example, adopt the German model of having a percentage of board-level seats for representation of the employees.
throwanem 7y ago
Oh, it all sounds fine, but why wouldn't it? The foxes always make a compelling case for why they're the ones to guard the henhouse.
malandrew 7y ago
There is nothing specific and thus nothing measurable so it's handwavvy and subjective. For example, take "This starts with compensating [our employees] fairly". What criteria will they use to determine if this if being achieved? Without any additional revenues/profit, the only option you have is to change the distribution of revenues/profit. You could reward investors less and employees more, but investors will defect to those investments that pay them more. You could pay individual contributors more and management less, but management will defect to employers willing to pay them more. I just don't see how any of these goals are achievable since they are so subjective. Depending on who you ask, someone people will say American corporations are a long way from achieving these and some will say American corporations already do these things.
tareqak 7y ago
I would start by defining terms rigorously. Here are the words I saw: value, customers, expectations, investing, employees, compensating, fairly, providing, important, benefits, supporting, training, education, skills, changing, diversity, inclusion, dignity, respect, dealing, ethically, suppliers, good, partners, companies, missions, communities, respect, protect, environment, embracing, sustainable, businesses, generating, long-term, shareholders, capital, innovate, transparent, effective, engagement Why? 1. Look at how the gig economy pushes contractors further and further towards being employees in all but name, but so much in the way of benefits is tied up in whether or not the name or classification applies. 2. The statements talk about benefits that corporations bring and the support they provide but neglect to mention the costs they incur and the side-effects they place upon others. Corporations are organisms of a kind, and most if not all organisms consume some inputs to produce some outputs. Some of the those outputs are waste. That waste must to be accounted for and processed. Where would the BP oil spill and the PG&E wildfires be accounted for in those statements. 3. The statements avoid the mention of the term consumers, which is how many companies perceive and treat their customers driving the interactions between them to be increasingly banal and scripted. Consider how often in this forum we hear of "selling eyeballs" in advertising. 4. Similar to 3 but more generally, the statements make no mention of accountability in the cases of the spectrum of harm caused by ignorance, negligence, and further along that spectrum all the way to outright malice. The statements try to separate the positive things that human beings are capable of producing from the negative without mentioning the negative at all never mind the ever present probabilities. Failing to mention and own the harm that a corporation can cause makes me think of "rainbows and unicorns", and results in the corporation failing to truly possess genuine humility. 5. I think all the four points I listed above are actually a direct result of this point that I'm about to expand upon: for whatever reasons, corporations try to remove humanness from within and without. By removing the humanness from within, the corporation becomes less sensitive when it does manage to do harm. By removing the humanness outside, they reduce the other human beings they work with into a number of nouns: customers, employees, suppliers, communities, shareholders. As a point of interest, consider the US Constitution and how it both defines the frame of the US government and the other entities it interacts, but also sets constraints on its behavior.

rectang 7y ago

> Curious where people thing they are wrong or incomplete. Enforcement.

rgacote 7y ago
And case law.
- jforman 7y ago
  Case law is on the side of corporations having no generalized duty to maximize profit on a day-to-day basis, for what it's worth. Corporations can exist for any number of reasons and the fiduciary duty is much more limited than people generally expect. My wife wrote a law journal article on this but it isn't digitized unfortunately.

tomatocracy 7y ago

This statement is being billed as 'demoting shareholder value' but I don't think that's what it is. These are all very good ways to deliver shareholder value, especially in mature markets. In other words it's telling you how they plan to reach that goal, not that they have suddenly changed their goals.

pessimizer 7y ago

They're incomplete in that all of the statements lack any falsifiable content. They're vapid, nonspecific, and obvious. This is clearly a PR exercise, possibly with the hope of publicly allying with one of the Democratic primary contenders, or a strong potential Trump challenger. Statements about planned obsolescence, disposable plastic packaging, repairability or specific forms of rent seeking are examples of the kinds of statements that would be serious.

jeffrallen 7y ago
Or specific maximum CEO to lowest salary ratio targets.
kingsolmn 7y ago
> This is clearly a PR exercise I hope this isn't the case, but that's what kept repeating in my head while I was reading it. If this is an honest sentiment and the start of a change in the way business runs then we'll see that in short order. But, in the end, it all comes down to making money and not "the greater good".

RockIslandLine 7y ago

"This starts with compensating them fairly and providing important benefits." So 51% of corporate profits are reserved for the employee bonus pool? And all employees are eligible for said bonuses? It's not hard to come up with examples of where this fails. Don't give me aspirational pie in the sky. Give me operational policy.

travisoneill1 7y ago
This. Whenever someone calls for "fairness" without a formula to calculate I immediately disregard.
wormseed 7y ago
Should 51% of losses come out of employees pockets?
- TheOtherHobbes 7y ago
  Employees fired during a townturn will certainly have emptier pockets than they used to.
- throwaway2048 7y ago
  losing $1000 hurts a huge amount of people more than a billionaire losing a billion does. How many billionaires are homeless after their ventures implode?
  - FussyZeus 7y ago
    > How many billionaires are homeless after their ventures implode? Has this happened in recent memory, at all? Because when I was growing up and getting the pro-capitalist America view of things on the regular, I vividly recall that capitalism is all about your success individually, that you risk it all and if you lose, you lose. Even Elizabeth Holmes, an entrepreneur* who's business not only failed, massively, not only caused a man's suicide, not only lost fortunes both public and private, all without ever producing a SINGLE FUNCTIONING OR USABLE PRODUCT, she left a rich woman if I'm not mistaken. *I was gonna quote that word here but no, I'm not going to because the mythical status of these people in American society is a joke. Anybody can be an entrepreneur. There are no qualifications and no requirements and you cannot break someone's faith in the "mythical rich 1%" than having them work for one, directly for a year, and see how maladjusted, how emotionally vulnerable, and how utterly dependent they are on subordinates for even trivial tasks.

analogwzrd 7y ago

If they're serious about decreasing the importance of shareholder value, then they'll re-design executive and management compensation to be tied less to the company stock price.

phamilton 7y ago
I wonder if there's a way to tie the other pieces into shareholder value. ESPP is an easy way to let employees see upside when the stock does well. How could we tie serving customers to stock value? Being good partners? It may be that we can't, and therefore stock price is a bad metric focus on.
- einhverfr 7y ago
  Indeed the rise of ESPP's due to ERISA are why I consider Nixon the closest President we've had to being actually Socialist.
- dhimes 7y ago
  Personally I like the idea of profit-sharing.
leot 7y ago
"Shareholder value" misses at least two critical bits of context: 1. over what timescale? 2. at what level of risk? As soon as they are incorporated, it's obvious that firms have both more leeway and more responsibility to take care of a wider range of stakeholders.

acjohnson55 7y ago

"Dealing fairly and ethically with our suppliers" omits the responsibility to choose suppliers ethically, as well. The supply chain creates plausible deniability for negative externalities for the consumer, the business they directly interact with, and middlemen down the supply chain. This is one of the biggest problems of global capitalism, today. There's very little accountability.

kingsolmn 7y ago
> "Dealing fairly and ethically with our suppliers" omits the responsibility to choose suppliers ethically, as well. Great point! But, if this document is a starting point in Ernest, then as long as this is followed then it's a good start. The next iteration should, then, include a strong commitment to objective fairness in the supplier selection process. Whether or not that actually happens will depend on the commitment to remove corruption in the process.

0xDEFC0DE 7y ago

>Investing in our employees This should also mean cutting down on abusive or low-paid contractors, if they exist, and converting them to employees.

mempko 7y ago

This statement was more of a signal to the American people. It's up to us to vote and make the policy decisions to make this possible. As Noam Chomsky often says, even if a CEO wanted to do the right thing, they can't because of the structural constraints. They would be fired so fast. So it's up to us to change those constraints.

hos234 7y ago
He is correct. I don't know why you are getting downvoted.
excursionist 7y ago
That's not quite what Chomsky says... > The concentration of wealth and enhancement of corporate power translate automatically to decline of democracy. Research in academic political science has revealed that a large majority of voters are literally disenfranchised, in that their own representatives pay no attention to their wishes but listen to the voices of the donor class. It is furthermore well established that elections are pretty much bought: electability, hence policy, is predictable with remarkable precision from the single variable of campaign spending, both for the executive and Congress. https://truthout.org/articles/noam-chomsky-moral-depravity-defines-us-politics/ https://truthout.org/articles/noam-chomsky-moral-depravity-d... Most Americans are politically disenfranchised and political decisions are often made counter to what the majority want and vote for, in favour of elite and corporate interests. It's pretty amazing to claim corporations are signalling some kind of unity and/or support of the general public based on this PR piece, while their money, lobbying, and power are doing the exact opposite.

JustSomeNobody 7y ago

> Investing in our employees. This starts with compensating them fairly and providing important benefits. Every CEO who signed this was nodding, thinking, "we do that already."

vasilipupkin 7y ago

Soviet Union had show trials and U.S. has show letters. The legal purpose of a corporation is to generate returns for shareholders. If training employees and helping customers advances that goal, then corporations should do it. Otherwise - no. Goes without saying that corporations should maximize shareholder value using legal means only.

Ididntdothis 7y ago
As far as I know the purpose of a corporation is to conduct lawful business. I don’t believe the law says anything about shareholder returns.
- vikramkr 7y ago
  The law definitely doesn't, otherwise it would be illegal to do things like donate to charity as a corporation. If all shareholders get together and vote unanimously to take all the money in the corporation and give it away, then they can totally do that. If the law mandated maximizing shareholder returns then shareholders would no longer be free to instruct the entity they own to do what they want it to if it conflicts with increasing profits
  - vasilipupkin 7y ago
    Ok, you are nitpicking. The legal purpose is to advance the interests of shareholders. Sure, shareholders can give away all the money and earn zero returns ( presumably they would register a non profit if they wanted to do that ) but it would be illegal to do something that shareholders didn’t agree to. Did shareholders of the signatories agree to forego profits in order to make customers happy ? Of course not.
    - vikramkr 7y ago
      I'm not nitpicking, and the legal purpose of a company is not to deliver shareholder returns. IIRC, most company incorporation specify the legal purpose of the corporation to be to do the business that the corporation is made to do. Here's the excerpt from my certificate of incorporation: "The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. " And the same agreement vests in the officers the ability to do whatever is necessary to further that purpose. You obviously can't go against the results of a direct shareholder vote but officers have enormous leeway. If they decide to forgo profits in order to make customers happy, whether or not that is meant to drive long term growth, that is completely legal as long as there are no conflicts of interest.

OscarCunningham 7y ago

In a circumstance where bosses are forced to tradeoff between these goals, how should they choose?

anticensor 7y ago
Preservation of company (including the ownership structure and charters) > Profit (overall from institution to dissolution) > Other benefits
- OscarCunningham 7y ago
  Surely there need to be weightings? If any amount of profit is better than any amount of other benefits, how is the situation different to now?
  - anticensor 7y ago
    Preserving profitability with unchanging charter, business model, and ownership structure (including approportion of shares) is harder than maximising profit.

mytailorisrich 7y ago

In that list only the last point, delivering value to shareholders, is a purpose of a corporation. A purpose is not the same as something in its interest or that a "nice" corporation might do. For example, investing in its employees might be in the corporation's interest in order to fulfill its purpose. But a corporation is not created in order to invest in its employees... This is a PR exercise, as already commented by someone else.

jopsen 7y ago
> This is a PR exercise, ... Quite possibly, but the fact that it is necessary, suggest that businesses are recognizing that there is a problem. Words is a first step.
- throwaway2048 7y ago
  If these corporations wanted to make things better, they could, today, instead we get a bunch of completely meaningless back patting, and zero action. Words without action don't mean shit.

khawkins 7y ago

Most of this is obviously desirable, but the explicit message is "we commit to doing good", with the implicit message being "we can be trusted to do good". The mechanisms which guarantee these promises are wholly unaddressed. For example, there's no mention of competition or its belief that healthy, fair competition brings about these things. In fact, it's distinctly anti-competitive in the fact that the leadership of all of these companies are behind closed doors coordinating a message like this. Instead of going to a fancy conference and chumming it up with each other, then patting yourselves on the back about what great people you are, lead by example and hold the others to task. Make the living conditions of your employees better and then attack your competitor for not keeping up. Quit using the latest cultural cause as a marketing stunt and focus on making a better world for your customers and employees. The fact that you wrapped your corporate logo in a pride flag for a month doesn't do a thing to help your employee whose sanity is tested every day by their crappy manager, whether they're gay or not. And figure out how to still make all this profitable in the long run.

ditonal 7y ago
I couldn't agree more strongly. I tend to get harshly downvoted when I bring up Google on Hacker News (since it employs a disproportionate amount of Bay Area engineers that hang out here and then get defensive about it), but no other company did I see quite the disconnect between what they SAY they aspire to and how they ACT. Google has built an incredibly strong PR brand on being the "good guys", a "not a conventional corporation", "don't be evil", etc. But in a way it's far more dangerous. At least we know what Goldman Sachs is about, making money, the employees there largely know it, the world around them knows it, people know to be on guard when dealing with Goldman because you know what their motives are. With Google, having worked in NYC with finance companies and spent many years at Google, people are Google are as obsessed with money, success, and prestige as any finance employee. But they SAY they are about making the world a better place, responsibility etc. Where this leads is not, Google doesn't do bad things, but the much scarier, they do wrong things but saying they can't be wrong because Google is the one doing it, and Google is supposedly good! Taking a page from Nixon, "when the president does it, it's not illegal." This came to a head during the Maven debate over using Tensorflow to build auto-aim killbots. The most common ethical defense amongst employees was "well, if we don't do it, Amazon will do it, and that would be worse! Because we're Google, and we're the good guys." Now if a crack dealer said, it's alright for me to sell dangerous narcotics to these children and addicts, because if I don't do it, someone else will. And that person could be even worse! Would ANYONE accept that argument as ethically coherent? Of course not, yet these otherwise very intelligent Google employees seemingly swallowed up Google's absurd logic without thinking. You become the good guy by NOT doing the bad things, not by doing the bad things while claiming it's alright because you SAID you're the good guys. Now, to pre-empt people accusing me of derailing, I'm not because this is extremely relevant to the original article being discussed here. This is banks leaders like Jamie Dimon following Google's lead. You don't have to actually take any REAL moral stand, you don't have to make any real ethical decisions, all you have to do is TALK about it a lot. Control the message. It's dishonest and it's hypocritical but it's worked out very well for Google. Compare Google to Uber. If you just look at the facts, between the Kelly Ellis accusations, the Andy Rubin thing, many more examples, Google's sexual harassment FACTS are actually WAY worse than what Uber was accused of. Yet Uber now has this awful reputation for being terrible to women while Google gets way less flak in both the tech community and the broader world - why? All because Larry and Sergey played the PR game way better than TK, they were the cool hip burners who cared about progressive stuff, while really they run their companies with the exact same corporate malfeasance, profit at any cost strategy of any NYC financial institution. Bottom line, we need to hold companies accountable with ACTIONS, and if they give us WORDS instead of ACTIONS we should be MORE critical, not drop our guard and be LESS critical.

pdonis 7y ago

> Curious where people thing they are wrong or incomplete. The whole premise of the article is wrong. The premise is that the problem with corporations is that they only consider the interests of their shareholders. That's wrong. The actual problem with corporations is that corporate governance has broken down, so that corporations no longer consider the interests of all their shareholders, and the shareholders themselves are no longer involved in determining the corporation's goals. Most shareholders now, in terms of percentage of voting stock ownership, are not individuals but mutual funds, who don't care what the corporation's goals are as long as its stock price and dividends meet targets; and CEOs, even if their share holdings are small as a percentage of the total, can easily get themselves special compensation packages and golden parachutes regardless of whether they improve the corporation's situation or not.

pmiller2 7y ago
> Most shareholders now, in terms of percentage of voting stock ownership, are not individuals but mutual funds, who don't care what the corporation's goals are as long as its stock price and dividends meet targets; and CEOs, even if their share holdings are small as a percentage of the total, can easily get themselves special compensation packages and golden parachutes regardless of whether they improve the corporation's situation or not. You stopped just short of what I think is the real issue here. Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. There’s literally an episode of Black Mirror about this. They “privatize profits and socialize costs,” as the saying goes, and they don’t blink at doing things that may be illegal, because the profit reward is so strong. This is the kind of thinking that had oil companies suppressing climate change research in the 80s and tobacco companies suppressing lung cancer research in the 40s and 50s. A feel good statement by a couple hundred CEOs isn’t going to do anything about that.
- pdonis 7y ago
  > Corporations these days are simply “financial paperclip maximizers”: amoral entities that do whatever is profitable, consequences beyond the bottom line be damned. I don't think "whatever is profitable" pins it down enough. They do what is profitable on a short time scale. They don't do what is profitable over long time scales like 30 or 50 or 100 years. If they did, they would not be able to get away with, for example, privatizing profits and socializing costs, because what enables them to do that is that the profits show up in the short term but the costs only show up in the long term. Back when corporate governance worked, shareholders were mostly individuals and they typically held shares on a long time horizon. That created obvious incentives to judge corporations by profits on a long time horizon. But now, most shareholders are mutual funds who judge individual corporations on a short time horizon--if the corporations don't make their numbers, the mutual fund trades their stock away. That means corporations have no incentive now to look at profits on a long time horizon--even though their shareholders do.

em3rgent0rdr 7y ago

They do have merit...but we already have a legal term for such an entity that is for-profit but also intends to benefit society: https://en.wikipedia.org/wiki/Benefit_corporation https://en.wikipedia.org/wiki/Benefit_corporation

aantix 7y ago

“Fairly” - implying that they could pay more, but don’t? Lots of businesses operate on razor thin margins, but still serve if a purpose. What should be their course of action?

nerdponx 7y ago

Until I see "abatement of lobbying" I won't believe any of this has good intentions.

kemitchell 7y ago

The statements themselves have no merit. They are so nebulous, so unnaturally and uniformly connotation-positive, that they defy measurement, and therefore accountability. They may be useful for virtue signalling. But none of the virtues signaled are particularly controversial. They may be useful for developing more enlightened self-interest among investors and the intermediaries that vote their shares. But they change nothing about the governance structure of the firms. Stockholders elect directors appoint officers who run the companies. Many of us have seen corporate "mission statements" or "core values" or "company principles" changed with great fanfare and no discernible effect on substantive corporate behavior. This is even fuzzier than that. This release announces a change to a kind of generalization of many corporate mission statements. Fuzzy in, fuzzier out. In the end, I have to be suspicious. The only meaningful signal I read here is an open, united affront to the principle of simple shareholder primacy. In the balance of power, that behooves executives, who experience simple shareholder primacy as an accountable constraint on their discretion. Business Roundtable is an interest group for executives. It is not an interest group for customers, workers, suppliers, communities, shareholders, or their representatives. It may choose to try and leverage customers, workers, suppliers, communities, and their representatives against shareholders. That has to be a far more delicate process when you're not the owner of a special class of stock that assures you stay in power.

dv_dt 7y ago

One thing that comes to main is taht the companies should, for example, adopt the German model of having a percentage of board-level seats for representation of the employees.

throwanem 7y ago

Oh, it all sounds fine, but why wouldn't it? The foxes always make a compelling case for why they're the ones to guard the henhouse.

malandrew 7y ago

There is nothing specific and thus nothing measurable so it's handwavvy and subjective. For example, take "This starts with compensating [our employees] fairly". What criteria will they use to determine if this if being achieved? Without any additional revenues/profit, the only option you have is to change the distribution of revenues/profit. You could reward investors less and employees more, but investors will defect to those investments that pay them more. You could pay individual contributors more and management less, but management will defect to employers willing to pay them more. I just don't see how any of these goals are achievable since they are so subjective. Depending on who you ask, someone people will say American corporations are a long way from achieving these and some will say American corporations already do these things.

tareqak 7y ago

I would start by defining terms rigorously. Here are the words I saw: value, customers, expectations, investing, employees, compensating, fairly, providing, important, benefits, supporting, training, education, skills, changing, diversity, inclusion, dignity, respect, dealing, ethically, suppliers, good, partners, companies, missions, communities, respect, protect, environment, embracing, sustainable, businesses, generating, long-term, shareholders, capital, innovate, transparent, effective, engagement Why? 1. Look at how the gig economy pushes contractors further and further towards being employees in all but name, but so much in the way of benefits is tied up in whether or not the name or classification applies. 2. The statements talk about benefits that corporations bring and the support they provide but neglect to mention the costs they incur and the side-effects they place upon others. Corporations are organisms of a kind, and most if not all organisms consume some inputs to produce some outputs. Some of the those outputs are waste. That waste must to be accounted for and processed. Where would the BP oil spill and the PG&E wildfires be accounted for in those statements. 3. The statements avoid the mention of the term consumers, which is how many companies perceive and treat their customers driving the interactions between them to be increasingly banal and scripted. Consider how often in this forum we hear of "selling eyeballs" in advertising. 4. Similar to 3 but more generally, the statements make no mention of accountability in the cases of the spectrum of harm caused by ignorance, negligence, and further along that spectrum all the way to outright malice. The statements try to separate the positive things that human beings are capable of producing from the negative without mentioning the negative at all never mind the ever present probabilities. Failing to mention and own the harm that a corporation can cause makes me think of "rainbows and unicorns", and results in the corporation failing to truly possess genuine humility. 5. I think all the four points I listed above are actually a direct result of this point that I'm about to expand upon: for whatever reasons, corporations try to remove humanness from within and without. By removing the humanness from within, the corporation becomes less sensitive when it does manage to do harm. By removing the humanness outside, they reduce the other human beings they work with into a number of nouns: customers, employees, suppliers, communities, shareholders. As a point of interest, consider the US Constitution and how it both defines the frame of the US government and the other entities it interacts, but also sets constraints on its behavior.