Three major declarations signaled the rise of “stakeholder capitalism”. Then came the virus. Time will tell how this concept continues to evolve and mutate in a post-pandemic environment. One would hope that the ideas laid out here may serve as guidance for rebuilding economies and businesses.
AUG 19, 2019 – Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’
“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:
- 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.
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
About
“Business Roundtable exclusively represents chief executive officers (CEOs) of America’s leading companies. These CEO members lead companies with more than 15 million employees and more than $7 trillion in annual revenues.”
December 2, 2019 – World Economic Forum Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution
“The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large. The best way to understand and harmonize the divergent interests of all stakeholders is through a shared commitment to policies and decisions that strengthen the long-term prosperity of a company.”
January 14, 2020 – A Fundamental Reshaping of Finance. Larry Fink, BlackRock Chairman and Chief Executive Officer letter to shareholders.
“In the near future – and sooner than most anticipate – there will be a significant reallocation of capital. Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward.
The importance of serving stakeholders and embracing purpose is becoming increasingly central to the way that companies understand their role in society. As I have written in past letters, a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders. Ultimately, purpose is the engine of long-term profitability.
Over time, companies and countries that do not respond to stakeholders and address sustainability risks will encounter growing skepticism from the markets, and in turn, a higher cost of capital. Companies and countries that champion transparency and demonstrate their responsiveness to stakeholders, by contrast, will attract investment more effectively, including higher-quality, more patient capital.”
About
BlackRock is a global investment manager with a commitment to help more and more people plan for their financial future. Size of fund USD 17 trillion.
Source: https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter