The CEOs of BP plc, Chevron Corp., ConocoPhillips and ExxonMobil joined with many of the nation’s most powerful business chiefs on Monday to rewrite a vision of how a corporation should be viewed, basically dismissing the theory that shareholder interests are paramount.
The Business Roundtable CEO members said they “share a fundamental commitment to all of our stakeholders,” which include customers, employees, suppliers and local communities.
“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.”
Of the 192 current members, 181 signed the statement, which also included the CEOs of Marathon Oil Corp., Marathon Petroleum Corp., Noble Energy Inc., Phillips 66 and TC Energy. Additional energy industry CEOs also signing on were Alliant Energy, American Electric Power, Duke Energy, Edison International, Freeport McMoRan Inc., Lyondellbasell, NRG Energy Inc., Sempra Energy, Southern Company and Vistra Energy.
Some company CEOs who did not sign were not eligible because an interim chief is in place or the company is transitioning between leaders including General Electric and NextEra Energy.
The Business Roundtable has issued principles of corporate governance since 1978, and every version since 1997 had endorsed principles of shareholder primacy: corporations exist principally to serve stockholders. The updated statement supersedes previous strategies and outlines the “modern standard” for corporate responsibility.
“The American dream is alive, but fraying,” said JPMorgan Chase & Co.’s Jamie Dimon, who chairs the Business Roundtable. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term.
“These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”
Industry leaders also lent their support for the updated statement, citing the positive impact the commitment could have on long-term value creation.
“CEOs work to generate profits and return value to shareholders, but the best-run companies do more,” Progressive Corp. CEO Tricia Griffith said. “They put the customer first and invest in their employees and communities. In the end, it’s the most promising way to build long-term value.”
According to the statement, “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all…
“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.”
Among other things, the CEOs committed to investing in employees by “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.”