“Ethical Markets has long advocated and worked toward reforming corporations and global finance and we, as a Certified B. Corporation, applaud this article in Harvard Business Review, it’s now time for all those CEOs who signed the Business Roundtable letter advocating and committing to all company stakeholders (not just shareholders) TO WALK THEIR TALK!
~Hazel Henderson, Editor”
3 Ways to Put Your Corporate Purpose into Action
May 13, 2020
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When leading money managers embrace the need for corporations to be socially responsible and the Business Roundtable (BRT) declares that the purpose of a corporation is “to create value for all stakeholders,” it is safe to say that purpose has gone mainstream in the corporate narrative. A consensus is emerging that society and diversified investors are best served by companies that focus on sustainable value creation and respect the legitimate interests of all stakeholders, not just stockholders. But how can these high ideals be put into practice? That corporate employees and host communities have borne the brunt of the economic effects of the current pandemic only underscores the deepening sense that our corporate governance system’s empowerment of the stock market has undermined the fairness of our economy.
If companies and institutional investors are serious about responsible, sustainable wealth creation in a manner fair to all corporate stakeholders, then they must match high-minded rhetoric about purpose with accountability. This will require a new governance form that makes a company’s obligations to fulfill its purpose enforceable.