Statement on the Purpose of a Corporation

Delivering Long-Term Value to All Stakeholders

On August 19, 2019, nearly 200 CEOs of America’s largest companies adopted a new Statement on the Purpose of a Corporation declaring that companies should deliver long-term value to all of their stakeholders – customers, employees, suppliers, the communities in which they operate, and shareholders. The best modern CEOs have been running their companies in this way for a long time; they signed the Statement as a better public articulation of their long-term focused approach and as a way of challenging themselves to do more.

Business Roundtable CEOs share a fundamental commitment to all of their stakeholders. In the Statement they committed to:

  • Deliver value to customers 
  • Invest in employees
  • Deal fairly and ethically with suppliers
  • Support the communities in which they work
  • Generate long-term value for shareholders

Two years later, CEOs have powerfully demonstrated their commitment to work for the benefit of all stakeholders.

Deliver Value to Customers

Business Roundtable members stepped up to support customers during the pandemic. Retailers adapted to provide safer shopping experiences for customers with modified store hours and cleaning protocols. Business Roundtable companies developed new innovations to keep customers safe; Mastercard’s technology allowed for more of its small business customers to utilize touch-free payments at brick-and-mortar establishments and Honeywell created a chemical coating for air filters that could kill 97% of the coronavirus in homes and businesses. And when customers faced tough economic realities, nearly two-thirds of Business Roundtable companies offered payment flexibility and nearly a third discounted products or services to customers. Energy companies like Duke Energy and Edison International expanded their assistance for customers having trouble paying their bills, including no service disconnections for nonpayment.

Invest in Employees

America’s leading companies value their employees and understand the importance of investing in their health and wellbeing by providing support during both good and difficult times.

Of the Business Roundtable companies that responded to a survey question, 48% of them said that 90% or more of their employees are paid more than the U.S. median wage. Nearly all companies took additional steps to support their employees during the pandemic. More than 80% expanded paid leave and more than half paid additional bonuses to frontline workers. For example, in 2020, Walmart provided $2.8 billion in total cash bonuses to associates. Other Business Roundtable members like Amazon, Target, Progressive and Johnson & Johnson also offered special bonuses or compensation to employees.

Some 80% of Business Roundtable companies offer health insurance to both full-time and part-time employees. On average, Roundtable companies covered 80% of employee health care premiums. Nearly all companies offered paid sick leave, and more than half of companies offered subsidized childcare. In addition, 95% of companies offer tuition assistance, benefitting at least 180,000 employees in 2020. Walmart announced it will cover the cost of college tuition and books for employees participating in its “Live Better U” educational program and Abbott recently announced a first-of-its-kind STEM high school internship program is now available for college credits, helping bolster the next generation leaders in STEM.

Deal Fairly and Ethically with Suppliers

On average, Business Roundtable companies contracted with more than 900 small businesses, including those owned by minorities, women and veterans. In addition, 30% of companies worked with more than 2,000 small businesses, 20% worked with more than 3,000 and 17% worked with more than 4,000. Nearly two-thirds of Business Roundtable companies spent more than $100 million on products and services from small businesses, with a quarter spending over $1 billion. 

Best Buy committed to spend $1.2 billion with BIPOC and diverse businesses by 2025, McDonald’s is accelerating its allocation of advertising dollars to diverse-owned media companies, production houses and content creators, Delta Airlines is seeking to double how much they spend with Black-owned businesses by 2025, and Coca-Cola announced its commitment to increasing its spending with minority-owned media companies.

Support the Communities in Which They Work

The majority of Business Roundtable companies donated more than $22 million in charitable cash contributions and $2.3 million in non-cash contributions in 2020. Nearly three-quarters of companies donated personal protective equipment, or PPE, in response to the pandemic.

Bank of America committed $250,000 in funding to renovate and expand RestoreOKC’s campus, which will foster economic mobility for families and neighborhoods in Northeast Oklahoma City and Pitney Bowes’ commitment to the Fairfield County Business Collaborative for Education Equity is aiming to improve education equity in Fairfield County. In Chicago, JPMorgan Chase committed $150 million to advance racial equity

Generate Long-Term Value for Shareholders

Companies continued to deliver strong returns to shareholders, including the majority of U.S. households who have direct or indirect ownership via pensions, 401(k)s or investment accounts, all of which benefit from dividends and higher stock prices.

A recent piece from JUST Capital finds "stakeholder capitalism to be better for shareholders.” Financial performance of the publicly traded Business Roundtable signatory companies held up versus the Russell 1000 Index during the period from 8/17/2020 to 6/30/2021. An equally weighted basket consisting of publicly traded BRT signatory companies returned 40.92%, compared with 30.52% for the Russell 1000 Index. Year-to-date, JUST’s indexes—the JUST 100, and the JULCD, which is a broad-based index of the top companies in each industry with the highest stakeholder scores—have outperformed the Russell 1000 by 300 basis points and 37 basis points, respectively. Our research also suggests that stakeholder-led companies routinely do better on return on equity, profit margins, and other financial measures.” 

Note: The information shared on this web page utilizes internal survey data collected and aggregated by Business Roundtable to demonstrate member companies' broad commitment to all stakeholders.

Since the beginning of the pandemic, Business Roundtable companies have used their resources, nationwide footprint and innovations to meet the unprecedented challenges facing the country. Business Roundtable companies have been “moving the needle” by producing, distributing and administering the vaccine. They prioritized employee and customer safety, while continuing to deliver critical supplies and services to all Americans. Business Roundtable companies have played a leading in role educating the public about continued prevention and safety measures and building vaccine confidence and uptake among Americans. They have also provided small-and-medium sized businesses with COVID-19 prevention and vaccine education resources. Business Roundtable CEOs are proud to do our part and work with policymakers at all levels to defeat this pandemic and rebuild our economy equitably, so everyone has the tools and opportunity to succeed.

As some of the country’s largest employers, Business Roundtable CEOs believe they have a role to play in driving real change. On June 5, 2020, Business Roundtable Chairman Doug McMillon of Walmart established a Special Committee of the Board to identify meaningful steps Business Roundtable companies can take to advance racial equity and justice. Business Roundtable member CEOs are stepping forward to make philanthropic investments, update employment practices and innovate within their businesses. Business Roundtable CEOs are also identifying and actively supporting key policy changes that would advance racial equity and close racial disparities and will continue to engage with policymakers at the federal, state and local level to advocate for these changes.

There will be more to do. Business Roundtable acknowledges that this will be an ongoing process and that meaningful progress will require sustained efforts over time. Business Roundtable will continue to listen and learn and to find ways to support real change.

Business Roundtable CEOs recognize the need to bolster their focus on underrepresented populations to ensure equitable hiring, promotion and compensation practices. This includes stepping up to the challenge of advancing diversity and inclusion in corporate America.

A number of Business Roundtable companies have committed to steps to increase corporate diversity. To track progress, Business Roundtable supports, as a leading practice, voluntary public disclosure of key diversity metrics on at least an annual basis, including board diversity, senior executive diversity, workforce diversity and supplier diversity. Many Business Roundtable member companies are increasing transparency on corporate diversity by voluntarily disclosing their diversity metrics, including hiring and leadership.