Dina Medland is an independent commentator and Alison Taylor is Executive Director of Ethical Systems. Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance by Lucian A. Bebchuk and Roberto Tallarita (discussed on the Forum here).
The gentlemen do protest too much, we think—with apologies to William Shakespeare for abusing his fine words in Hamlet, Prince of Denmark. Lucian Bebchuk and Roberto Tallarita, both at Harvard, have joined fellow princes in academia (not a princess in sight) and, it seems, the Financial Times in a veritable onslaught on stakeholder capitalism over the last 10 days. Amplifying a message by loud repetition is one way to promote the status quo in corporate governance and also, perhaps, to sell newspapers. But in a world of misinformation, we found our eyebrows rising.
The timing of this onslaught, just as the US presidential election starts to hurtle towards November 3, 2020, is interesting. It comes too in the middle of a pandemic that has seen a decoupling between the real economy and a stock market pushed ever higher by the monopoly power of technology companies. At issue is the historic statement of corporate purpose made by the Business Roundtable last year. The BRT is now composed of 200 CEOs, not the 180 still referred to by many in the media too bored by the concept of corporate purpose to keep track. Given that each of these CEOs on average employs 100,000 people or more, the addition of 20 more is a significant number.
