Generate economic returns to owners or sustainable long-term value creation? This was the debate from a roundtable of nearly 200 major US corporations back in 2019.
The principal objective or reason for existence of most organisations is to generate returns for its owner(s). Unless your business is third sector or operates at a breakeven on purpose, it’s unlikely you could disagree.
These 200 American CEOs now disagree.
The statement says “Major employers are investing in their workers and communities because they know it is the only way to be successful in the long term. Theses modernised principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans” Jamie Dimon, chairman and CEO, J P Morgan Chase – employer of over 2000 people across Scotland’s central belt.
Blackrock chief Larry Fink said, “Purpose is not the sole pursuit of profits but the animating force for achieving them”. BlackRock employ more than 450 staff in Edinburgh.
It’s not that difficult really, they have realised that a successful organisation is more than the return it provides its owners, value is a commitment to all stakeholders.
It may be a US phenomenon but clearly what happens in the US impacts the global landscape.
How long before the rest of the world catches on and has the pandemic fundamentally changed how we view business?
(source: CNBC.com)
