Thousands of workers and customers at Tampa-St. Pete companies could be affected directly or indirectly by a shift in focus at an influential business organization.
The Business Roundtable, an association of chief executives at the nation’s best-known companies, has issued a new statement on corporate responsibility. The organization discarded the concept of “shareholder primacy,” or the idea that corporations exist principally to serve shareholders, and now says the purpose of a corporation is to benefit all stakeholders, including customers, employees, suppliers, communities and shareholders.
The move comes amid growing questions about how well capitalism in its current form is serving society, as well as growing demand by younger workers that their employers drive social change, Fortune reported. “Most readers think, as do I, that elevating the interests of other stakeholders — customers, employees, communities, the environment, etc.— is a good thing. But a few worry it will lead to worse returns for shareholders, or that it is simply window dressing,” Fortune’s Alan Murray wrote.
The new statement was signed by 181 CEOs. None of them head companies headquartered in the Tampa-St. Pete area, but many of their companies have large offices here or other strong ties to the area.
Laurence Fink, chairman and CEO of money manager BlackRock (NYSE: BLK), was among those signing the new statement and his ideas carry some weight with the local companies where BlackRock is a major stakeholder. That includes Clearwater IT distributor Tech Data (Nasdaq: TECD), where BlackRock controls 12.1 percent of the outstanding stock; St. Petersburg-based manufacturer Jabil (NYSE: JBL), where BlackRock control 9.75 percent of the stock; and Raymond James Financial (NYSE: RJF), a St. Petersburg-based financial services firm where BlackRock controls 5.9 percent of the shares.
Also signing the statement were Michael Lawrie, chairman, president and CEO of DXC Technology (NYSE: DXC), the Virginia IT services company that bought Tribridge and maintains a big presence in Tampa; and Tricia Griffith, president and CEO of The Progressive Corp. (NYSE: PGR), the Ohio insurance firm that has a controlling interest in American Strategic Insurance in St. Petersburg and a massive call center in Tampa.
Other CEOs who signed the statement and whose companies each employ hundreds locally include:
- Julie Sweet, CEO, North America, Accenture
- Jeff Bezos, chairman, president and CEO, Amazon
- Brian Moynihan, chairman and CEO, Bank of America
- Giovanni Caforio, chairman and CEO, Bristol-Myers Squibb
- Michael Corbat, CEO, Citigroup
- Lynn Good, chairman, president and CEO, Duke Energy
- Alex Gorsky, chairman and CEO, Johnson & Johnson
- Jamie Dimon, chairman and CEO, JPMorgan Chase
- William Brown, chairman and CEO, L3Harris Technologies
- Robert Moritz, chairman, PricewaterhouseCoopers
- Stuart Parker, CEO, USAA
Leaders of retail and consumer firms, including Macy’s, Target, Walmart, Home Depot, American Airlines and United Airlines signed the statement. So did Hubertus Mühlhäuser, the former CEO of commercial kitchen supplier Welbilt (NYSE: WBT) in New Port Richey. He’s now CEO at CNH Industrial (NYSE: CNHI).
The new position by the Business Roundtable is significant but not surprising given trends in recent years, said Troy Keller, an attorney at the international law firm Dorsey & Whitney.
“What is sometimes forgotten is that most CEOs have always wanted greater flexibility to invest long term and to focus on the interests of all their stakeholders, including employees and customers and the communities in which they operate. But the ‘short-termism’ version of shareholder primacy had become so entrenched that it put intense pressure on CEOs to prioritize short term results. Those pressures still dominate, but now that a sizable enough group of shareholders are expressing priorities in these other areas, particularly on the environmental side, it empowers CEOs to take back some degree of flexibility (and hence control), and we are seeing that in this announcement,” Keller said.