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Leon Kaye headshot

One Year After the Business Roundtable Statement, Purpose Is Still a Work in Progress

By Leon Kaye

It’s been just over a year since the 181 CEOs affiliated with the Business Roundtable (BR) signed a letter agreeing that from that moment forward, executives need to think about how their companies can benefit all stakeholders with a mission of purpose: customers, employees, suppliers, local communities and shareholders.

“The American dream is alive, but fraying,” said Jamie Dimon, chairman and CEO of JPMorgan Chase & Co. and the Business Roundtable’s chairman, in an August 2019 public statement. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”

We’re in a much different world than we were 12 months ago, and in a recent survey that the Harris Poll and Just Capital completed, 90 percent of Americans agreed with the sentiment that it’s important for large companies to support an economy that serves all people.

The problem, however, is that companies are not perceived as applying this sense of purpose when it comes to who we now describe as “essential workers.” Less than half of those surveyed said the current economy has a positive impact on workers’ financial well-being. In contrast, 72 percent of the same respondents said shareholders are benefiting.

So, it’s clear corporate America has some work to do. The compass may be pointed in the right direction, but corporate America is far from finding true north, as 80 percent of Americans questioned in this poll believe U.S. public companies should consider their impacts on all shareholders equally.

“The perception is that shareholders reap the lion’s share, while other stakeholders lag behind, especially communities, workers, and the environment,” write the report’s authors.

And as for enthusiasm, approximately one in five survey respondents said corporations are performing “very well” when it comes to executing their purpose.

The survey was completed in late July, well before news headlines were jammed with stories about the California wildfires and Hurricane Laura. Nevertheless, 37 percent of Americans have a dim view of companies’ effects on the environment, the negative impact that scored highest in this survey. Other negative effects cited included both the financial and health well-being of U.S. workers.

The number of signatories to BR’s statement has since increased to 220 companies, but this study shows that businesses, no matter what their purpose may be, still have some work to do to earn citizens’ trust. There are countless factors: the constant hyping of and confusion over potential COVID-19 vaccines, the uneven distribution of funds during the federal government’s paycheck protection program, and news stories about how layoffs were handled as well as what retail workers are often experiencing on the job.

In fairness, part of the problem here — aside from the deluge of bad news on a daily basis — is that many companies are still grappling with how they are communicating their purpose. “There has been little guidance for board directors, senior executives, and investors on how purpose should be best put into practice,” writes Bob Eccles for Forbes. “Purpose needs to be enacted as an organizing principle, informing strategic decision-making and capital allocation, and drawing on the everyday values and culture to deliver the organization’s vision.”

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Image credit: Jamie Street/Unsplash

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

Read more stories by Leon Kaye