RECOMMENDED READING
The Undeniable Success of Israeli Industrial Policy
How Industrial Policy Made the Desert Bloom
Keeping Up with the Jones Act

Wednesday marks the first anniversary of the Business Roundtable’s vocal renunciation of “shareholder primacy” in a statement that claimed to “redefine the purpose of a corporation.” Like most efforts at “corporate social responsibility,” the initiative has proved long on public relations, short on action, and lacking in effect. Among the 181 CEOs who signed, Harvard Law School’s Lucian Bebchuk and Roberto Tallarita have found only one whose board of directors gave approval. On the organization’s own website, the most recent “Principles of Corporate Governance” still dates from 2016.

The Business Roundtable’s CEO members sought to ensure the public that they could be trusted as benevolent leaders of the economy, but instead they have demonstrated precisely the opposite — that multinational corporations are incapable of fulfilling obligations voluntarily to anyone besides shareholders, and external constraints are needed.

In fairness, the market’s competitive pressures discourage any one firm from hampering short-term profitability for the sake of corporate actual responsibility. But that is precisely where an institution like the Business Roundtable could play a valuable role, were it genuinely committed to addressing interests beyond those of the shareholders who control the firms themselves.

Continue Reading at Washington Examiner
Oren Cass
Oren Cass is the executive director at American Compass.
@oren_cass
Recommended Reading
The Undeniable Success of Israeli Industrial Policy

A prominent public role in R&D, business subsidies, and restrictions that keep both knowledge and production within our borders are not incompatible with rapid economic growth and technological progress.

How Industrial Policy Made the Desert Bloom

A case study on the public investments behind the Israeli economic miracle

Keeping Up with the Jones Act

American Compass policy advisor Gabriela Rodriguez discusses the Jones Act, shipping and supply chains, and striking a balance between national security and consumer interests.