CEOs promise people before profits in new statement on 'Purpose of a Corporation'

Catholic News Agency | 8/20/2019 | Staff
Les7799 (Posted by) Level 3
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New York City, N.Y., Aug 20, 2019 / 04:00 pm (CNA).- A new commitment by business leaders to move past pure profit, and commit to employees, communities, and the environment, echoes what the Church has been teaching about business for years, a Catholic scholar has said.

On Monday, chief executives on the Business Roundtable—181 CEOs of corporations like Apple, Amazon, Wal Mart, banks and other businesses from various industries—issued a new joint Statement on the “Purpose of a Corporation.”

Statement - Alters - Years - Policy - Duty

The updated statement alters more than 20 years of policy that previously held that the primary duty of a company is to provide profit for its shareholders. The Business Roundtable has issued regular statements on corporate governance since 1978, and in 1997 stated that “the principal objective of a business enterprise is to generate economic returns to its owners.”

Now, the roundtable lists several other commitments of business leaders in addition to shareholder profit, including investing in employees through training programs, dealing ethically and fairly with suppliers, and caring for the environment and for local communities.

Move - Professor - Andrew - Abela - Dean

“I think it’s a really good move,” Professor Andrew Abela, Dean of the Busch School of Business at the Catholic University of America, told CNA.

“Church teaching has been, I think, some of the most sensible teaching on the role of a business anywhere,” he said, to “make a profit as well as to serve society.”

Statement - Principles - Abela

The statement reflects those principles, Abela said.

“It’s something that the Church has been saying for decades,” Abela said, noting that the new announcement is not an “about-face” on the priorities of corporations, but is rather “an expansion of the understanding of the purpose of the firm.”

Statement - Action - Cover - Business - Owner

The statement will need to be put into action to be effective, but it gives “cover” to any business owner who claims that a company has duties to employees and...
(Excerpt) Read more at: Catholic News Agency
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