Chart of the week: Serving all stakeholders is all the rage
But is it more than just lip service?
Since 1997, the group of leading US executives known as the Business Roundtable has stated in its Principles of Corporate Governance that ‘corporations exist principally to serve their shareholders’. This transformation in the thinking of CEOs at some of the world’s biggest companies shows how much demand has grown for a more responsible capitalism. One that recognises long-term profits are dependent on a thriving ecosystem of customers, suppliers, employees, communities and the environment — as well as shareholders. By some measures, it would seem that the Business Roundtable CEOs are largely walking the walk, as well as talking the talk. But investors wanting concrete evidence face a big problem — the available scoring systems are inconsistent and poorly correlated. The big issues facing our society won’t be solved by government policy alone. Read more about whether companies are truly serving their stakeholders in ‘Corporate responsibility’, an article in our latest InvestmentInsights.