Questions Every Business Leader Must Ask Now That CEOs Have Rewritten the Purpose of a Corporation
This week the Business Roundtable, a group of the country’s most influential business leaders, released a new statement defining the next generation of corporate purpose. After nearly 50 years of shareholder primacy, the Roundtable stated that companies should commit to balancing the needs of ALL of stakeholders – including workers, customers, communities, and more.
It represents a new north star for business leaders looking to measure performance and gauge impact on their stakeholders. It’s a huge deal, and there are lots of new questions emerging around how to put this new vision into action.
Whether you are a business leader or an investor, we have practical answers here at JUST Capital about how to measure what matters with a stakeholder approach.
Every year, we poll the American public to find out what matters most regarding just business behaviors and what a company should prioritize. Over the last five years, we’ve talked to more than 95,000 people. The results are compiled into this definitive Roadmap for corporate America each year. The good news: The American people’s priorities are largely aligned with Roundtable’s new Statement on the Purpose of a Corporation.
We also have four years of corporate data, research, and rankings to benchmark performance on each stakeholder and related issues, as well as the supporting business and investment case for adopting just businesses behaviors.
So, what should we be looking to?
Here’s a set of questions corporate colleagues can ask themselves about each key stakeholder to start putting this new purpose into practice:
Stakeholder #1: Customers
Roundtable Statement: We commit to delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.
Ask Yourself:
- Are we protecting customer privacy through secure information storage and transparent privacy policies?
- Do we treat all customers in a fair and inclusive way, without bias or discrimination? How many customer discrimination controversies do we have each year?
- Are we creating products/services that are beneficial and non-harmful to health, environment, and/or society?
Stakeholder #2: Employees
Roundtable Statement: We commit to investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.
Ask Yourself:
- What percentage of our workers are making a living wage?
- Are we providing quality, affordable health insurance options? What about best-in class sick, parental, and paid time off policies that support work-life balance?
- What are our training and workforce development policies? Do we have a tuition reimbursement policy?
- Have we conducted a pay equity analysis to ensure equal opportunity for all? If yes, how are we disclosing the results?
- Are we promoting diversity, inclusion, and equal opportunity programs and targets?
Stakeholder #3: Suppliers
Roundtable Statement: We commit to dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.
Ask Yourself:
- Have we disclosed a policy, commitment, or effort to source from local suppliers or support local businesses?
- Do we have a policy that requires suppliers to follow workplace standards and basic human rights?
- Do we have a supplier diversity policy to support minority and women owned businesses, among others? What about veteran-owned suppliers?
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Stakeholder #4: Communities
Roundtable Statement: We commit to supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.
Ask Yourself:
- What efforts are we taking to minimize pollution? What environmental management systems do we have in place? How are we measuring and disclosing them?
- How much are we giving back to local communities through charitable donations, employee volunteering, and community programs?
- Are we supporting local communities by using local products and resources?
- Have we conducted a formal human rights impact assessment of our entire business operations? Have we disclosed our findings?
Stakeholder #5: Shareholders
Roundtable Statement: We commit to generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.
Ask Yourself:
- Does our leadership team act with integrity and take responsibility for company wrongdoings?
- Do we have a diverse board, across gender, race, ethnicity and age? Is it independent?
- Is the leadership team focused on driving long-term profitable growth? Is executive compensation linked to just business performance?
- Is our CEO paid reasonably compared to our workers and the financial performance of the company?
We hope these questions help in putting the Roundtable’s principles into action. If you’re a business leader or work at a corporation, especially one in the Russell 1000, and haven’t yet engaged with JUST Capital, please reach out to our corporate engagement team to learn more. We’re eager to help you on your journey to justness and create a more inclusive economy for all Americans.
