Productivity Reimagined

1Productivity, Real and Imagined

On August 19, 2019, the Business Roundtable, a Washington, DC–based association of chief executive officers, issued a statement signed by 181 CEOs of major US corporations titled “Statement on the Purpose of a Corporation.” The new document affirmed a “fundamental commitment” to customers, employees, suppliers, and communities.

“Each of our stakeholders is essential,” the statement concludes. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”¹

This document superseded previous declarations that companies should only advance the interests of shareholders.

While there’s evidence that this was little more than a PR gesture,² the statement was perhaps the most significant acknowledgment by corporate leaders that our economy is not delivering on the dream of shared prosperity.

We have always believed that our system of free enterprise generates a rising tide that lifts all boats. Accordingly, businesses grow by providing goods and services that customers choose to buy. That growth leads to more and better jobs and higher profits that are reinvested to grow the business further. Companies then ensure their long-term viability by helping their suppliers succeed, supporting their surrounding communities, and treating our planet with respect. Positive outcomes for all stakeholders flow naturally from this virtuous cycle.

The Business Roundtable statement reflects a widely held sentiment ...