Sometimes earth-shattering truths slip in through the side door. Comparable to the unexpected revelation and conversion of Paul on the road to Damascus, The New York Times reports from the U.S. Business Roundtable Front that, “the chief executives of nearly 200 of the nation’s largest companies pledged to revise the longstanding principle that shareholder interests come first.”
The Times’ understated caption of the year, “the ‘purpose of a corporation’ just changed,” doesn’t begin to do justice to this reforming, regenerative capitalism zeitgeist impulse. Even the Business Roundtable’s formal statement to wit that “said companies must also invest in employees, deliver value to customers, deal fairly and ethically with suppliers and support local communities” is but an embryonic foreword to Harvard Business School Professor Rebecca Henderson’s more compelling vision that, “purpose driven businesses could be the catalyst that drives the global, systemic change we need to reimagine capitalism in a way that works for everyone.”
Make no mistake about what is happening: this is a belated recognition of uncontrolled market animal spirits across borders inhabiting an unconstrained capitalism equally responsible for globally rising seas, greenhouse gas emissions, and soaring embedded, intergenerational, socioeconomic inequalities. Again, the Times’ observation, “the move was seen as both a recognition of corporate evolution and a tacit acknowledgment of the scrutiny companies are facing,” is salon drawing room stuff.
The current system is not working for America First, Brexit, and Gilets Jaunes voters, Hong Kong protestors, Argentina’s Recovered Factories movement and every indigenous peoples’ revolt against exploitation and injustice. “The world is flat” means that stakeholders “deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity,” but this will only happen when stakeholders are also shareholders.
An equity share is the right to vote. Beyond “Shareholders Primacy,” the working world is ready for “Stakeholders as Shareholders Primacy.” In the 1worker1vote movement’s “2018 Activities Summary & Socioeconomic Profits & Purposes Vision for 2019,” we describe and show how capital as an instrument can advance “humanity@work” (the Mondragon cooperative ecosystem’s self-description) through proven and emerging hybrid shared ownership models.
BlackRock investment manager, Larry Fink, in his 2019 annual letter to chief executives affirmed that, “Purpose is not the sole pursuit of profits but the animating force for achieving them. Profits are in no way inconsistent with purpose – in fact, profits and purpose are inextricably linked.”
Next steps must transform contemporary policy, politics and power paradigms to inspire, permit and sustain a truly “free marketplace” equating stakeholders to shareholders. Prioritizing economic democracy, widespread, deepened and broadened stakeholder ownership unchains the equalizing possibilities of mission-driven, profit-seeking and innovating social enterprises.
These triple bottom-liners (people, planet, profit) synthesize technology while repurposing humans into center ring, train to a hope-inspired future, and commit to an indispensable individual and community “sweat equity” and “earned equity” commons where empowered worker-owners have a voice and vote to align their profits with their values. Already, the American Sustainable Business Council convenes close to 250,000 of these business organizations, movements and companies.
We can advance and integrate social enterprises, impact investing, and economic democracy with worker-ownership as the foundational principle throughout a growing global practice community, to contribute results that light up the healing souls within us. In our lifetimes, we can save the planet and ourselves.
-Michael A. Peck-
1worker1vote co-founder & executive director
Monday, August 19th
- “The Business Roundtable, which is led by JPMorgan Chase & Co. Chief Executive Jamie Dimon, said it is changing its statement on the purpose of a corporation to include taking into account “all stakeholders,” including employees, customers and society, as opposed to only earning higher profits for shareholders. Dimon in the past has challenged the shareholder-profit model, calling it too short-sighted and limiting to companies’ long-term goals.” – The Wall Street Journal
- Group of top CEOs says maximizing shareholder profits no longer can be the primary goal of corporations – The Washington Post
- Shareholder Value Is No Longer Everything, Top C.E.O.s Say – Chief executives from the Business Roundtable, including the leaders of Apple and JPMorgan Chase, argued that companies must also invest in employees and deliver value to customers. – The New York Times
- How Shareholder Democracy Failed the People – Shareholder democracy seemed like a good idea at the time. What we got was shareholder supremacy. – Andrew Ross Sorkin, The New York Times