The Business Roundtable took the surprising step earlier this week of redefining the “purpose of a corporation.” In a two-page advertisement in The Wall Street Journal, the influential business group said it was no longer sufficient to say companies existed solely to make profits for shareholders. The 181 CEOs who publicly supported the restatement issued on August 19 said that companies should seek to add value for employees, their communities and the companies within their supply chains as well as shareholders.
It was the first time since 1997 that the organization had dramatically rewritten its purpose statement.
Reaction to the controversial shift was swift. Media covered the news from a variety of angles, but one thing was clear: the statement attracted attention and will trigger conversations in C-suites and communications departments across the country.
Amy McGahan, a managing director in Dix & Eaton’s Media Relations practice, moderated a discussion with the following firm executives to discuss the potential impacts on companies of all sizes:
- Gregg LaBar, senior managing director who leads Dix & Eaton’s Environmental, Social and Governance and sustainability communications practice
- Angela Rodenhauser, senior vice president who co-leads Dix & Eaton’s investor relations practice
- Karin Bonev, senior vice president who oversees our employee engagement practice and change management focus area
- David Hertz, managing director who leads our media relations practice
The key takeaway: The announcement comes as the nation enters an increasingly volatile period that will challenge the communications of businesses across the country. The Business Roundtable’s shift will increase the pressure for businesses of all sizes to consider a more holistic way to monitor performance and communicate progress on a host of measures important to key stakeholders. Watch our team’s analysis here.