by Dan Burns

Aug 23, 2019, 6:30 AM

The new Business Roundtable Declaration: Serious soul-searching or preposterous PR stunt?

I don’t know. I wasn’t there. But I’d say, a lot more of the latter.

This week, the Business Roundtable put out a statement signed by 181 corporate CEOs purporting to redefine the purpose of the corporation.

The statement, which has garnered widespread praise among commentators, basically proposes to junk the idea, fashionable since the 1980s, that the purpose of a corporation is to “maximize shareholder value.” Now these captains of industry propose to have the corporation revert to something like its posture during the New Deal–Great Society era, when corporations recognized a broader duty to “stakeholders,” meaning workers, communities, and the economy as a whole.
(The American Prospect)

The author of that, Robert Kuttner, basically considers it a publicity stunt, and a big pile of ordure, and I agree. I’m interested, though, in speculating as to what’s really going on in the heads of the people behind it. Do they really think people are going to buy this?

Trout, incidentally, had written a book about a money tree. It had twenty-dollar bills for leaves. Its flowers were government bonds. Its fruit was diamonds. It attracted human beings who killed each other around the roots and made very good fertilizer.

So it goes.

– Kurt Vonnegut, Jr., Slaughterhouse Five, p. 167.

That’s a perfect, genius piece of writing, but in the present context absolute greed and blind lust for power don’t entirely explain American big-time corporate CEO behavior. Not in their own minds, that is.

Back in college I noticed, and this is not confirmation bias on my part, that on the whole the kids from the wealthiest families tended to be those most “careful” with money. They’d been drilled from early on that everything in life is a transaction, with a winner and a loser, and that they’d damn well better always be the winners, because that’s life. In more than a few cases this functioned at cross-purposes to the individuals’ own fundamentally kindly, generous natures, creating psychological tension that would manifest itself in weird ways.

And as a general rule that tension would seem to stick around. From what I’ve seen the really important ability for those climbing to the top has little to do with running a business. Most big corporations that have been around for a while essentially run on their own steam, and their fortunes rise and fall with the economy as a whole, regardless of who is purportedly “in charge.” A future big-time CEO’s talent is that he (and it’s almost always “he”) knows in any context which backs to stab and which butts to kiss.

So, and though they’re extremely careful never, ever to show it, once they reach Fortune 500 CEO-hood it’s never really clear just what their roles are, in a complex, changing world. And one way it shows is in a reality-challenged belief that everyone else, where they work and in the public at large, takes them as seriously as they take themselves. Hence, stuff like the above.

In any case, we’ll see for sure how far any new “statement of purpose” goes when the Trump Crash hits.