The country’s most successful companies have undoubtedly proved themselves in the past by being able to make a profit. However, consumers are always changing. As millennials and gen Xers get older, social responsibility has started to become a more important area of focus for top CEOs.
What Does Social Responsibility Have To Do With Business?
The Business Roundtable is a group of CEOs of the largest companies in the United States. Occasionally, the group releases reports about how the world of business is changing and what is most important to shareholders as well as consumers. On Monday, the Business Roundtable released a statement suggesting companies should focus on social responsibility (maybe even more than profit).
More than 180 CEOs signed Monday’s statement, including executives at Amazon.com, American Airlines, and JPMorgan Chase & Co. It marks the first time the group has named something other than shareholder value as the number one priority for companies.
“This new statement better reflects the way corporations can and should operate today,” Johnson & Johnson CEO Alex Gorsky stated. “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”
Company executives also outlined four other priorities, including employee benefits and wages, support communities, and performing business with ethical suppliers.
How Businesses Are Changing
All of this comes at a time when many companies are taking stances on issues outside of the business world. Many companies have stepped forward in support of the LGBT community, for instance. Much of this pressure to support certain causes have stemmed from social media and even calls from employees.
It has been speculated that many Americans are looking to large companies to take a stance on important issues because the U.S. government has failed to provide solutions when it comes to economic changes like environmental challenges, gender, and race equality. Instead of serving shareholder first, companies have begun to focus on investing in their employees, giving consumers what they want and need, and supporting communities.
“While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders,” the statement noted. “We commit to deliver value to all of them, for the future success of our companies, our communities, and our country.” The statement also listed a number of actions each of the companies is committed to making, including:
- Providing value to each of their customers.
- Investing in our employees through benefits and investment opportunities.
- Abiding by fair and ethical business practices with suppliers.
- Supporting the communities in which each company works through sustainable business practices.
- Committing to transparency and long-term value for shareholders.
“The American dream is alive but fraying,” Jamie Dimon, chairman, and CEO of J.P. Morgan Chase and chairman of Business Roundtable said. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”
Readers, how important is a company’s social responsibility to you when you’re choosing where to shop and invest?