tomgoodman

CNBC summary of the CEOs’ statement:

“The re-imagined idea of a corporation drops the age-old notion that corporations function first and foremost to serve their shareholders and maximize profits.
Investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities are now at the forefront of American business goals.”

Nothing new here. Prudent managers have always known that doing the latter is the best long-term way to achieve the former. These CEOs want readers to believe that they have just discovered Wisdom and Ethics.

mispoken

I’ll counter with this quote from the article. Perhaps fluff, perhaps a marker for the beginning of some sort of change. All I’ve heard for the last 15-20 years that I’ve been a serious investor has been “maximizing shareholder returns”. I haven’t heard much rhetoric like this.

“Others suggested that while it’s unclear what impact the statement will have, it’s notable coming from a group that has traditionally been cautious. “It really is quite significant,” said Peter Cappelli, a professor who studies labor economics at the University of Pennsylvania’s Wharton School. While "the entire Wall Street community is not going to roll over because of this,” he called it a “marker for change” and a “corrective.” “It sounds like what they’re describing is what was the standard view before the mid-1980s — before the shareholder value idea really started to spread.”