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AUGUST

**13, 2020**

Meyerson on TAP

CEOs: Stakeholders, Shmakeholders

Back in 2019, when 181 corporate CEOs signed the Business Roundtable's
pledge to not maximize shareholder value quite so much if doing so hurt
everybody else, Americans who were skeptical of our form of
capitalism-or merely "Show me" Missouri types-viewed the pledge with
a jaundiced eye. The purpose of the corporation, the CEOs avowed, had to
be to benefit not just their shareholders (a group that happily included
themselves) but their consumers, their workers, and even the society at
large. To which the only possible rational response was a grunted
"Uh-huh."

Since they took that pledge, it's worth noting that share buybacks
have continued apace, funneling corporate revenues away from R&D, wages,
and investment, and into shareholders' ever-open mitts. It's worth
noting that not a single corporate signatory has proposed to add
employee representatives to its board of directors, or even endorsed the
House bill that would forbid these firms from compelling consumers and
workers to submit to forced arbitration of grievances and forbidding
them from taking those companies to court.

The latest confirmation of that "Uh-huh" grunt appeared last week in, of
all places, The Wall Street Journal's op-ed page, where the directors
of the Harvard Law School's Program on Corporate Governance unveiled
the results of a survey

they'd undertaken. Noting that anything even coming close to a
reformulation of corporate purpose had to be approved by that
corporation's board of directors, they polled the signatory CEOs as to
whether they had in fact even consulted their boards before signing the
pledge. Of the 48 who answered their query, 47 had not-they'd just
gone ahead and signed it.

"The most plausible explanation for the lack of board approval," the
authors noted, "is that CEOs didn't regard the statement as a
commitment to make a major change in how their companies treat
stakeholders." They further noted that JPMorgan Chase CEO Jamie Dimon,
who chaired the Roundtable at the time, didn't ask Morgan's board to
review or alter its guidelines, which state that the board "is
responsible for the oversight of management on behalf of the Firm's
shareholders."

Which is to say, Godot will arrive quicker than top-down stakeholder
capitalism. If Joe Biden and Kamala Harris are at all serious about
rebuilding America's middle class, it'll be up to them, and the
progressives, workers, activists, and others who elect them and then
make them do it.

~ HAROLD MEYERSON

Follow Harold Meyerson on Twitter

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