A few months ago, I wrote a piece for National Review about woke capitalism as part of a symposium on the issue. In my article, I laid out a case of optimism. It was a timid case, to be sure, but one of the arguments I made was that it is likely that “woke capitalism is nothing more than costless virtue-signaling.” In other words, corporations talk a big game, make big statements, and take actions with zero consequences for their bottom lines.
The Wall Street Journal has a piece today by and that suggests I may have been onto something:
Corporate leaders have been busy presenting themselves as guardians of the interests of “stakeholders,” such as customers, employees, suppliers and communities as well as shareholders. Our recent research, however, casts serious doubt on whether corporations are matching the talk with action.
The authors look at how the signatories of the Business Roundtable’s Statement on the “Purpose of a Corporation,” aimed at delivering value to all stakeholders, not only shareholders, have behaved since they signed two years ago. A tidbit here:
We’ve identified almost 100 signatory companies that updated their corporate governance guidelines by the end of 2020. We found that the companies that made updates generally didn’t add any language that elevates the status of stakeholders, and most of them reaffirmed governance principles supporting shareholder primacy…
We also found that about 85% of the signatory companies didn’t even mention joining the “historic” statement in their proxy statements sent to shareholders the following year. Among the 19 companies that did mention it, none indicated that joining the statement would cause any changes to how they treat stakeholders.
There is more in the article. This tells me that neither side has yet found a coherent or correct narrative to talk about what corporations are actually doing. Ultimately, both sides need to remember that corporations that wish to survive can’t ignore their bottom line and the impact of the their actual behaviors on it.