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What is the Business Roundtable, and Why is Everyone Talking About it?

Say Contributor

Yesterday, leaders of some of the biggest businesses in the world announced that they thought it was time for corporations to begin rethinking their role in society. Here’s a round-up of some of the most notable media responses. Table It The Business Roundtable is a group that consists of the chief executive officers of more than 181 major companies. Led by JPMorgan Chase & Co CEO Jamie Dimon, the group released a statement yesterday suggesting that corporations should no longer focus solely on generating profits for shareholders when making decisions, but should consider “all stakeholders,” which includes considering how their actions will impact their employees and the greater community. Too Little Too… Today, New York Times columnist Andrew Ross Sorkin was hesitantly supportive of the idea, giving credit to CEOs such as BlackRock’s Larry Fink and former Starbucks head Howard Schultz for being ahead of the curve in questioning the profits-above-all mantra. But Sorkin noted that in many ways the executives are belatedly realizing Americans “mistrust companies” greatly, and pointed out that public anger drove this decision, not altruism. Give ‘Em Enough Rope Conversely, the Wall Street Journal editorial board was aghast at the idea, calling the move “symbolic” and meant to appease “the socialist left.” The editorial argues that the executives realize that leaders such as Presidential candidate Senator Elizabeth Warren will, if given the opportunity, want to enact laws designed to force businesses to serve political goals favored “by unions, environmentalists and trial lawyers.” The Journal warns this statement likely won’t appease them and “The Roundtable CEOs may be selling Ms. Warren the political rope to hang them.” If nothing else, they are right that this statement isn’t enough for Warren, who wants Dimon and company to support her Accountable Capitalism plan, which would, basically, legally force them to be true to their word. Stake Out And over in Bloomberg, Matt Levine questions the often-repeated premise of shareholders as company “owners,” or as the singular priority of CEOS to begin with. He argues that the CEOs are rarely only answering to their returns-obsessed investors who aren’t thrilled about what the stock is priced at that month, but also to their own bosses, the board, founders and other primary stakeholders. Levine suggests that perhaps the Roundtable CEOs are suggesting that companies factor in environmental concerns and the wellbeing of their employees, even if it dings profits a little, out of the goodness of their hearts. Emphasis on perhaps. Or it’s also possible, Levine thinks, that the Roundtable CEOs want to use this altruism as a convenient cover to keep those pesky returns-obsessed shareholders at bay. -Michael Tedder Photo: Aaaron P. Bernstein/REUTERS