The Business Roundtable’s public rejection of “Shareholder Primacy”

— by Dr. Steve Sleigh, 1worker1vote advisory board member

The Council of Institutional Investors (CII) is the voice of progressive institutional investors and has fought hard to get asset owners (pensions, which are deferred workers wages) a seat at the table and hold management accountable. The Business Roundtable (BRT) statement, while a step in the right direction in acknowledging that shareholder value is not the only thing management should deliver on, could also be viewed as a side step around empowering the owners of firms (institutional investors) in favor of management. What an opportunity waste that would be.

Similar to ASBC CEO Jeffrey Hollander’s approach praising BRT’s new statement of corporate purpose but also noting that “words aren’t enough,” perhaps counting these metrics can serve as BRT post “shareholder primacy” moral guiderails:

  • How are BRT members going to act differently based on their own statement that “business as usual” is no longer sufficient?
  • Will they adopt more share-the-wealth programs with employees?
  • Will they invest more time and resources in communities where they operate?
  • Will they stop doing quarterly earnings calls in favor of longer and more sustainable and inclusive perspectives?
  • Will they perform and showcase annual accountability statements alongside their financial statements?
  • Will executive compensation align with employee compensation?
  • Will each company adopt progressive paid leave policies?
  • Will work place injuries and illnesses decline in their businesses?
  • Will BRT companies remain neutral when employees express a desire to have a union represent them?
  • Will BRT companies allow their employees and stakeholders a chance at meaningful worker ownership?

These are the policies that sustainable businesses put in motion. As ASBC’s CEO concluded, “Now it’s time for members of the Business Roundtable to put corporate action behind this statement, and ASBC and its members, such as 1worker1vote, look forward to working with them to ‘walk their talk.’”