As large companies in the UK are under increased pressure from the revised UK Corporate Governance Code to report on business purpose and engage effectively with stakeholders, big business in the USA has gone public on the issue.
We wrote in the New Year about the requirements for reporting on impact and establishing your corporate purpose, and in May about new “comply or explain” rules for employee representation on the boards of premium-listed companies. There are now clear indications that companies across the world are recognising the importance of purpose to stakeholders and long-term growth.
The Business Roundtable (BRT) lobby group has released a statement, signed by 181 CEOs of the USA’s largest and most influential companies, committing to take account of all stakeholders and not just their balance sheets. The BRT statement updates the group’s definition of corporate purpose and commits the CEOs to:
- deliver value to customers;
- invest in employees;
- deal fairly and ethically with suppliers; and
- generate long-term value for shareholders.
“Each of our stakeholders is essential,” BRT noted in the decision. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
Just days after the statement was published, the CEOs of 33 B Corps (certified companies using business for good) including Danone USA and Ben & Jerry’s took out a full-page advert in The New York Times challenging the BRT to act on its words.
These statements are graphic illustrations of the global pressure on business to operate through models that deliver real social impact, and an inclusive stakeholder approach. But to take them beyond the mere brand statements or at worst accusations of inauthentic "greenwashing", companies will have to put their words into action and make actual changes to their wider business models.