The organization representing the nation's most powerful leaders is rewriting how it sees the purpose of a corporation updating its decade-long affirmation of the theory that shareholder interests must be above all else.
A new statement released Monday by the Business Roundtable suggests balancing the needs of the various constituencies of the company and comes at a time of widening income inequality, rising public expectations for corporate behavior and proposals from Democratic lawmakers who have for the purpose of renewing or even restructuring American capitalism.
"Americans deserve an economy that allows everyone to thrive through hard work and creativity and lead a meaningful and dignified life," reads a statement from the organization, chaired by JPMorgan Chase CEO Jamie Dimon.
The group says that its members "share a core commitment to all our stakeholders" and commit themselves well to their customers, employees, suppliers and local communities. "Each of our stakeholders is essential," the group added. We are committed to delivering value for all of them for the future success of our companies, our communities and our country. "
The new statement puts a formal seal on a more stakeholder-oriented management approach, which some CEOs stand for individually It has come more than two decades since the lobby group, in a 1997 Corporate Governance Document, which explicitly updates, explicitly accepts shareholders first. "The Business Roundtable wants to emphasize that the primary purpose of a business enterprise is to generate economic returns for its owners," he writes.
This concept – often known as "shareholder primacy" or the obligation of the corporation to maximize shareholder value – rose to prominence in the mid-1980s and has since become a widely accepted management norm, one that critics claim to have led to short-term results and helped continue to pay CEO pay packages fueled by major stock rewards.
Even in the newer guidelines, the idea that maximizing shareholder value should be the primary purpose of the corporation was supported by the Business Roundtable, albeit less explicitly. In its 2016 paper, the group said the management's goal was "to create sustainable long-term value creation" and called on compensation committees to "stimulate long-term value creation." to all of the company's joint stock companies, "it stands for when it" contributes in a direct and meaningful way to building long-term value creation. "
The new statement comes as the difference between the growth in compensation of corporate executives and American workers at an astounding rate. percent since 1978, with one measure, while typical workers' compensation has grown only 12 percent over the same period.  In the meantime, a number of lawmakers are trying to force companies to consider larger goals. and the public when they do business or get sanctioned. Democratic presidential candidate Sen. Elizabeth Warren (MA) has proposed a plan that will require US corporations to hand over some of their board of directors to elected members of staff. , another hope in 2020, will prohibit corporations from buying back their own shares – a move that raises share prices – unless they offer a certain level of pay and benefits to workers. Other efforts include bills penalizing companies for data breaches or improving corporate board diversity.
Meanwhile, corporations are facing increasing pressure – whether they are customers, employees or public groups – to take positions on issues that affect society as a whole. The tech companies have pushed employees to oppose contracts with immigration and border control agencies. Walmart faces calls to halt gun sales after a recent mass shooting at one of its stores, with senior corporate leaders increasingly speaking out on social issues ranging from racism to LGBTQ rights as consumers increasingly look to spend money with companies that share their opinion.  It was not immediately clear which members of the Business Roundtable supported or opposed the change. And it remains to be seen how companies are changing their practices in light of new engagements.
But the new statement in a sense is a return to the past for the powerful lobby group. This is a remarkably similar statement from the distant past of the Business Roundtable. In its 1981 statement on corporate responsibility, the organization said that "corporations operate in a network of complex, often competing relationships that require the attention of corporate managers."
He continued to list the same stakeholders as the new statement, saying. that “balancing shareholder expectations for maximum returns over other priorities is one of the major problems that corporate governance faces. The shareholder must receive a good return, but the legitimate concerns of other constituencies must also receive due attention. "
These business titans come together for better corporate governance
leadership ? Follow us on Facebook and Twitter and subscribe to our  iTunes podcast .