Lucian A. Bebchuk and Roberto Tallarita update their previous research and show that the Business Roundtable CEOs who promised two years ago to shift their priorities to stakeholders…didn’t.
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….
Shareholders submitted more than 40 proposals to signatory companies on how to implement the statement’s vision. The companies all opposed these proposals, and most of the companies explicitly stated—in their proxy statement or in letters sent to the Securities and Exchange Commission—that the statement didn’t require any changes to their treatment of stakeholders.
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.
This is what we predicted two years ago: