The 50th anniversary of the publication of Milton Friedman’s essay advocating profit (within the law) as the primary purpose of the corporation in the New York Times was observed with reactions and responses from a range of experts. In our view, most missed the point. Unless otherwise explicitly noted and disclosed to investors in the…
Tag: Business Roundtable
How’s the CEO ‘Stakeholder Pledge’ Working Out? Depends Who You Ask – WSJ
VEA Vice Chair Nell Minow is quoted in this WSJ column by John Stoll about the BRT’s stakeholder rhetoric. Nell Minow, vice chair of ValueEdge Advisors, which consults with institutional investors on corporate governance, agrees with Mr. Bebchuk about tradeoffs, but she cautions “those tradeoffs are rarely permanent.” She said directors need to push executives…
The BRT’s Fake Stakeholder Promise: One Year In
A year from the Business Roundtable’s announcement that they were broadening their focus on stakeholders, what are the results? Unsurprisingly, the BRT gives itself an A. Executive Director Joshua Bolten writes in the Wall Street Journal: The CEOs who signed the new statement believe it better reflects their conviction that businesses can’t flourish over the…
‘Stakeholder’ Capitalism Seems Mostly for Show – WSJ
We said as soon as they accounted it that we did not believe the Business Roundtable’s new claims of commitment to stakeholders. Now Lucian Bebchuk and Roberto Tallarita confirm that we were right to be skeptical. By putting American workers through months of turmoil, the Covid-19 crisis has heightened expectations that large companies will serve…
People Before Profits: A New American Credo? | Stanford Graduate School of Business
A puff piece from Stanford — first it sets up Milton Friedman as a straw man by mischaracterizing him as a Scrooge-like figure who cared only about quarterly returns. Friedman would never have told corporate managers to pay attention to quarterly returns at the expense of long-term value. Next, the article touts the University’s own…
Performance Metrics: Accelerating the Stakeholder Model
When the Business Roundtable announced their “new” commitment to “stakeholders,” we said it was not meaningful unless we saw incentive compensation aligned to specific stakeholder goals. At the Harvard Law School Forum on Corporate Governance and Financial Regulation, Equilar research analyst Connor Doyle looks at current incentive plans tied to goals other than the traditional…
Interview With Ira Millstein — WSJ
One of the founding fathers and true visionaries of modern corporate governance is Ira Millstein. The WSJ asked him for his thoughts on the BRT’s stakeholder statement (he says it is not specific enough) and on the state of corporate governance today. An excerpt: In 1979, the Business Roundtable conducted a series of hearings and…
Column: Jeff Bezos becomes the first CEO to break his pledge to dump the ‘shareholder value’ model – Los Angeles Times
The most important question left by the recent pledge by nearly 200 major corporations to place their workers, customers, suppliers and communities ahead of their shareholders was: How will we know that the companies are adhering to the pledge? Jeff Bezos, a signatory to the statement issued Aug. 19 by the Business Roundtable, and chief…
A Reminder for CEOs Considering a Shift in Focus: Shareholders Are Still King – WSJ
VEA Vice Chair Nell Minow is quoted by John Stoll in this WSJ article about the BRT’s new “stakeholder” statement. Now, even as investor interests are increasingly cast as the root of many social problems, I offer this word of encouragement to shareholders: You may be unpopular, but you are still king. How do I…
More Reactions to the Business Roundtable’s Stakeholder Statement
More reactions: From the always-thoughtful and insightful Doug Chia: Like the Commonsense Governance Principles (1.0 and 2.0), it’s not about what is being said, which we all know is nothing new (e.g., the J&J Credo was written in the 1943; my most recent boss at The Conference Board, Steve Odland, often says “‘CEO’ stands for…
ValueEdge Advisors 