Governance – Corporate/Commercial
Top global firms commit to tackling inequality by joining Business for Inclusive Growth coalition
22/08/2019 – A group of major international companies has pledged to tackle inequality and promote diversity in their workplaces and supply chains as part of an initiative sponsored by the French Presidency of the G7 and overseen by the OECD.
The Business for Inclusive Growth (B4IG) coalition will be launched at the G7 Leaders’ Summit in Biarritz, France, taking place from 24 to 26 August 2019. Spearheaded by Emmanuel Faber, Danone Chairman and CEO, the coalition brings together 34 leading multinationals with more than 3 million employees worldwide and global revenues topping $1 trillion. Members have agreed to sign a pledge to take concrete actions to ensure that the benefits of economic growth are more widely shared.
B4IG coalition members will tackle persistent inequalities of opportunity, reduce regional disparities and fight gender discrimination. Companies have identified an initial pool of more than 50 existing and planned projects, representing more than 1 billion euros in private funding, to be covered under the initiative. The projects range from training programmes to help employees adapt to the future of work to greater investment in childcare, to increasing women’s participation in the workforce; to financially supporting small businesses, to encouraging greater participation in supply chains; and to enhancing the integration of refugees through faster integration to the workforce. Coalition members will seek to accelerate, scale up and replicate already existing projects, while significantly expanding their social impact.
The platform, chaired by Danone, consists of a three-year, OECD-managed programme. It aims at increasing opportunities for disadvantaged and under-represented groups through retraining and upskilling, as well as promoting diversity on the companies’ boards and executive committees and tackling inequalities throughout their supply chains. They will also step up business action to advance human rights, build more inclusive workplaces and strengthen inclusion in their internal and external business ecosystems…
…OECD Secretary-General Angel Gurría said: “Growing inequality is one of the biggest social challenges in the world today, perpetuating poverty, undermining social cohesion and trust. Sustainable economic growth means inclusive economic growth. It means giving every individual the opportunity to fulfil her or his potential, the chance not only to contribute to a nation’s growth but to benefit from it, regardless of their background or origins.”
…OECD Chief of Staff and Sherpa Gabriela Ramos, leader of the OECD Inclusive Growth Initiative, said: “The OECD has been documenting and raising the alarm bell regarding the increased inequalities of income and opportunities in OECD countries for decades. They do not only undermine social cohesion and trust, but they also hamper growth, by preventing our economies to take full advantage of the talent of its people and businesses. We are delighted to partner with leading companies that are committed to take action. Our experience, evidence and best practices are at the service of the Business for Inclusive Growth Initiative.”
The OECD website provides further information on the B4IG initiative.
Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’
Aug 19, 2019
Updated Statement Moves Away from Shareholder Primacy, Includes Commitment to All Stakeholders
WASHINGTON – Business Roundtable today announced the release of a new Statement on the Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.
Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance. Each version of the document issued since 1997 has endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With today’s announcement, the new Statement supersedes previous statements and outlines a modern standard for corporate responsibility.
“The American dream is alive, but fraying,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. and Chairman of Business Roundtable. “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.”
“This new statement better reflects the way corporations can and should operate today,” added Alex Gorsky, Chairman of the Board and Chief Executive Officer of Johnson & Johnson and Chair of the Business Roundtable Corporate Governance Committee. “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”…
The Business Roundtable Statement on the Purpose of a Corporation is below and the full list of signatories is available here.
Statement on the Purpose of a Corporation
Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.
Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.
While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.
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.
:: 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.
:: 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.
:: 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.
:: 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.
Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.
Big business, shareholders and society – What companies are for
Competition, not corporatism, is the answer to capitalism’s problems
The Economist https://www.economist.com/https://www.economist.com/
August 22, 2019
ACROSS THE West, capitalism is not working as well as it should. Jobs are plentiful, but growth is sluggish, inequality is too high and the environment is suffering. You might hope that governments would enact reforms to deal with this, but politics in many places is gridlocked or unstable. Who, then, is going to ride to the rescue? A growing number of people think the answer is to call on big business to help fix economic and social problems. Even America’s famously ruthless bosses agree. This week more than 180 of them, including the chiefs of Walmart and JPMorgan Chase, overturned three decades of orthodoxy to pledge that their firms’ purpose was no longer to serve their owners alone, but customers, staff, suppliers and communities, too.
The CEOs’ motives are partly tactical. They hope to pre-empt attacks on big business from the left of the Democratic Party. But the shift is also part of an upheaval in attitudes towards business happening on both sides of the Atlantic. Younger staff want to work for firms that take a stand on the moral and political questions of the day. Politicians of various hues want firms to bring jobs and investment home.
However well-meaning, this new form of collective capitalism will end up doing more harm than good. It risks entrenching a class of unaccountable CEOs who lack legitimacy. And it is a threat to long-term prosperity, which is the basic condition for capitalism to succeed….
…The way to make capitalism work better for all is not to limit accountability and dynamism, but to enhance them both. This requires that the purpose of companies should be set by their owners, not executives or campaigners. Some may obsess about short-term targets and quarterly results but that is usually because they are badly run. Some may select charitable objectives, and good luck to them. But most owners and firms will opt to maximise long-term value, as that is good business…
…Of course a healthy, competitive economy requires an effective government—to enforce antitrust rules, to stamp out today’s excessive lobbying and cronyism, to tackle climate change. That well-functioning polity does not exist today, but empowering the bosses of big businesses to act as an expedient substitute is not the answer. The Western world needs innovation, widely spread ownership and diverse firms that adapt fast to society’s needs. That is the really enlightened kind of capitalism.