My latest column is about the Business Roundtable’s recent statement on corporate purpose, and the controversy it’s kicked off. The organization, which used to support shareholder primacy, now says that businesses should serve their customers, employees, suppliers, communities, and shareholders.
Left-wing columnist Katrina vanden Heuvel called the statement a “sudden burst of conscience” and “a concession that corporations have failed to serve the public good.” Critics on the right see the statement as a concession to the left, too — and deplore it accordingly. The editorialists of the Wall Street Journal have taken several shots, writing that the statement panders to critics such as Senator Elizabeth Warren, and that the CEOs “are fooling themselves if they think this new rhetoric will buy off Ms. Warren and the socialist left.” The Journal’s response to the Business Roundtable included excerpting Milton Friedman’s classic essay, “The Social Responsibility of Business Is to Increase Its Profits.”
But the Roundtable’s statement isn’t so much a concession that corporations need to change their ways as it is a description of what they already do. . . .