The CEOs Want You to Know That They Care
With their new statement disavowing “shareholder value,” the CEOs of the country’s biggest corporations are trying to send a message: we feel your pain and we want to do better. They’re empty words, but it’s the latest sign that the masters of the universe are getting nervous about capitalism’s waning popular legitimacy.
America’s biggest corporations have an announcement: they feel your pain, and they are ready to become better citizens.
This week the Business Roundtable — whose greatest hits include NAFTA, killing major antitrust and consumer protection bills, broadening Reagan’s corporate tax cuts, and making it easier for companies to fire workers trying to form a union — announced that it is “modernizing its principles on the role of a corporation” to value all stakeholders, not just shareholders.
As a result, 181 CEOs of some of the world’s largest weapons manufacturers, banks, oil companies, pharmaceutical companies, manufacturers, and retailers have pledged to do their part to restore faith in meritocracy and make the American Dream a reality.
The business group promises that in addition to “generating long-term value for shareholders,” its members will also invest in their employees, “compensating them fairly and providing important benefits” through new training and education programs. Workers can look forward to an environment that fosters “diversity and inclusion, dignity and respect.”
The Roundtable also pledges to “[support] the communities in which we work.” From here on out, America’s corporate behemoths vow to “respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.”
These companies collectively control roughly $7 trillion, so we are required to listen to their promises — to seriously entertain the notion that instead of spearheading ecocide, Chevron, BP, and ExxonMobil are ready to get serious about developing an alternative to fossil fuels, that instead of firing workers and destroying communities, General Motors is going to retrain the people it has laid off and find a dignified place for them in its operations, that Bayer will stop denying that the products made by its subsidiary Monsanto cause cancer and kill people.
Has corporate America turned over a new leaf? Next year, instead of allocating 90 percent of their profits to share buybacks and derivatives or hiding their earnings in offshore tax havens, can we look forward to fresh plans to channel significant investment toward jobs, communities, and infrastructure?
Absolutely not.
No matter how much breathless commentary is churned out, no matter how many hand-wringing interviews with CEOs and business elites professing the need for American companies to behave more responsibly, morally, and so on, the Business Roundtable’s announcement is not an indication that corporate America is ready to put stakeholder needs before profits.
It is an indication of something, however. It’s the latest sign that elites are deeply worried, not just about the health of capitalism, but also about the legitimacy of our for-profit system.
Capitalism requires buy-in from working people. It might not seem so, since capitalism is experienced more as a force of nature than something we agree to or vote upon. But compulsion is insufficient for generating sustained profits, growth, and innovation. For capitalism to exist, ordinary people must find meaning in our for-profit society, they must willingly direct their creativity, energy, and passion toward their work. They must actively, or at least passively, believe that societal structures are capable of meeting their need for justice and security.
This collective belief is rapidly crumbling. For the past decade, calls for a different kind of society have been steadily getting louder.
Corporations and elites have done their best to ignore or belittle these calls, but it isn’t working. Widespread support for Bernie Sanders, a democratic socialist with a platform to provide health care, college, and jobs to all Americans, and for Elizabeth Warren, who is proposing serious new corporate regulations, shows how far the ideological landscape has drifted away from the common sense of neoliberalism.
The only thing the Business Roundtable’s announcement demonstrates is that business elites are finally waking up to this reality — that they have accepted that change is coming, and they recognize the need to get ahead of it.
But the train has left the station. Corporate America is going to have to offer more than empty promises.