Aug 2019

CEOs Turning Away From Only Prioritising Shareholder Value

Published August 2019

Maximisation of shareholder value as the primary goal of business no longer makes sense in the light of today’s global challenges. Companies are searching for a new approach that will deliver success in both the short- and long-term.

This week, nearly 200 CEOs from major US firms including Apple, Amazon and Walmart issued a joint statement seeking to redefine the purpose of a corporation. You can read it below.

Business leaders across the world are increasingly adopting goals that are reflected in this statement. The challenge, however, lies not in recognising the need for such goals, but in practically implementing them. Few CEOs today fail to understand why purpose is crucial, but many are left asking how they can put it into practice.

The Mars Catalyst team at Mars, Incorporated led by Bruno Roche has been developing innovative solutions to this question for over a decade in partnership with other multinational companies and leading academics from Oxford University, the Paris School of Economics, Stanford, the Sorbonne, CEIBS in China, ENSEA in Cote d’Ivoire and more.

Their research has culminated in the Economics of Mutuality (EoM) – a groundbreaking management innovation that enhances business performance by equipping leaders with practical business tools to solve the problems of people and planet profitably and at scale.

EoM discredits the assumption that human, social and natural value can only be created at the expense of financial value. By aligning a company’s practice with its purpose from top to bottom, through new performance metrics and new modes of profit construction, EoM generates multi-capital growth and earnings. It empowers business leaders to unlock the potential of modern, complex, multi-stakeholder ecosystems through building durable, reciprocal relationships.

EoM has been designed as a management innovation with the objective of transforming business performance from the inside out. Its power has been evident in diverse business conditions – from the micro-distribution of chewing gum in deprived East African and Southeast Asian communities through to global sales of a premium pet food brand in very mature markets.

As CEOs look to adapt their business practices to a rapidly changing landscape, the Economics of Mutuality offers a robust methodology and set of practical tools that will help transform business performance to build the world we want tomorrow.

Business Roundtable Statement on the Purpose of a Corporation

Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity. We believe the free-market system is the best means of generating good jobs, a strong and sustainable economy, innovation, a healthy environment and economic opportunity for all.

Businesses play a vital role in the economy by creating jobs, fostering innovation and providing essential goods and services. Businesses make and sell consumer products; manufacture equipment and vehicles; support the national defense; grow and produce food; provide health care; generate and deliver energy; and offer financial, communications and other services that underpin economic growth.

While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:

  • Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

  • Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.

  • Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

  • Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

  • Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate. We are committed to transparency and effective engagement with shareholders.

Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.

Photo: Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co., Chairman, Business Roundtable.


Other Articles

Jun 2024
Lisbon Conscious Business Education Conference 2024: Evolving Education for Ethical Business Practices 
Mar 2024
Asia Economics of Mutuality Forum 24-25 April 2024

Korean and global leaders in business, academia, government, and civil society will gather at Hanyang University in Seoul, South Korea, to launch the inaugural Economics of Mutuality Foundation and Hanyang University’s Global Forum on the role of business and investing in society. The event will take place from April 24 to 25, 2024. The two-day event will include addresses by Professor Colin Mayer, former Dean of Oxford University’s Said Business School; Chairman Moon Kook Hyun, President of the New Paradigm Institute and former CEO of Yuhan-Kimberly, and Dr. Jay Jakub, the Executive Director of the Economics of Mutuality Foundation, and co-author of the book, “Completing Capitalism.” The event will highlight the roles of academia, corporations, investors, family offices and entrepreneurs in creating an ecosystem of mutual value co-creation by how companies deploy their capital in society.

Mar 2024
Oxford Virtual Executive Education Program, September 12 – October 31, 2024

Driving Impact Through Mutual Value Creation, an 8-week online course brought to you by Oxford University’s Saïd Business School and the Economics of Mutuality team, will equip you to walk the talk of Stakeholder Capitalism.

Mar 2024
Nordic Economics of Mutuality Forum October 15-16

The first Economics of Mutuality forum to be held in Scandinavia, this event taking place October 15-16, 2024 will be hosted by Brandinnova, the Center for Brand Research at the Norwegian School of Economics (NHH), Jæren Sparebank, and the Economics of Mutuality Foundation.