NEW YORK, NY Aug. 19 (DPI) – The Business Roundtable, a policy club of corporate CEOs, came out this morning with a statement declaring that US companies should not focus entirely on maximizing shareholder value, and instead should consider the well-being of other constituencies.

Major media outlets today got excited about the statement, as though it was breaking new ground in this age of environmental degradation, income inequality and increasingly unregulated power of corporations.

In fact, many readers saw it the statement for what it was: A PR message intended to make nice with the rising political left, whose leaders – Sanders and Warren among them – are advocating new controls on corporations.

The NYT, The WSJ and The Washington Post all treated the statement as top-page news this morning, even though the substance of the message was not dramatically out of line with the longtime policies of most corporations, which have had to balance employee interests, customer interests and political interests as they see to serve their shareholders.

As one WSJ poster put it:

This is a public political statement – and an intentionally soothing one – crafted for these turbulent times. But there is not all that much new about it.

Did the leaders of these huge companies ever truly ignore the many other constituencies – customers, employees, neighbors, politicians of all stripes – over their shareholders? That is a simplistic and facile question – the fact is, business leaders always have had to consider all constituencies as they are building shareholder value. 

Recall the story of RJR in “Barbarians at the Gate” – they were massaging their earnings from cigarette sales every quarter because they were making TOO MUCH money for shareholders. They went out and spent millions on things like the Dinah Shore Classic simply to burn cash. It was just prudent and practical. To hand all the dough the shareholders all the time – well, that’s never been part of the equation.
We all deal with politics – in work, in family, in community, everywhere.  And so do CEOs.

Also from WSJ.com:

The purpose of the corporation is to follow the law and maximize stock holder value over time. Doing so, will co-incidentally serve other, but not all, ‘stakeholders’ as well. 

And from NYTimes.com:

Wait! Every one of these companies advertise that this is what they were already doing, looking out for their customers, caring for their employees, running an ethical supply chain. Could it be that…that they were lying? Is this statement just another advertisement signifying nothing. Show us your commitment to this idea by raising wages, increasing benefits, improving quality. Then we’ll believe you.