After a year of empty promises from CEOs, the groups propose a framework for substantive action
RECOMMENDED READING
WASHINGTON, DC ā As we approach the one-year anniversary of the Business Roundtableās statement on āstakeholder capitalism,ā a coalition representing perspectives across the political spectrum has released an open letter critiquing the Roundtableās empty approach to corporate responsibility and offering a more substantive path forward. The open letterās signatories include the executive directors of American Compass, the American Economic Liberties Project, and the American Principles Project.
While the Roundtableās statement promised a shift from years of shareholder primacy, the year since has seen no concrete follow-through. It is unclear how, if at all, the signatories are seeking to prioritize a broader set of āstakeholdersā when making key business decisions. The open letter calls for the Roundtable to undertake a series of actions that would indicate a genuine commitment to corporate actual responsibility:
- Establish clear priorities focused on the corporationās role. Firms should focus on creating good jobs for workers, maintaining a workplace compatible with family life, supporting strong communities, and advancing the long-term prosperity of the nation.
- Measure and disclose. The Roundtableās members should establish and report standardized metrics that would allow the public to evaluate the performance of their firms on fulfilling their obligations to workers, families, communities, and the nation.
- Support legislative reforms. While the collective-action problem discourages corporate actual responsibility by any individual firm, the Roundtableās members should speak together in support of rules that would require all companies to behave as they should.
Recommended Reading
How Corporate Actual Responsibility, Not Social Responsibility, Would Look
American Compassās Oren Cass outlines the arguments from an open letter sent to the Business Roundtable calling for corporate actual responsibility.
Open Letter Re: the Business Roundtableās Commitment to Corporate Actual Responsibility
After a year of empty promises from CEOs, a Left-Right coalition propose a framework for substantive action
Constraining the Corporation
Business leaders have lost contact with the communities and institutions that might hold them accountable, escaped from the oversight and regulation that would channel their activities, and proven themselves shameless in the face of whatever weak standards of decency the culture still attempts to muster.
