Business Roundtable 2019 Statement: A New Paradigm or Business as Usual?
This note focuses on the antecedents of, reactions to, and clarifications about The Business Roundtable's August 19, 2019, "Statement on the Purpose of a Corporation." The note includes background information on corporate governance as practiced in the United States in the twentieth and twenty-first centuries. It discusses "managerialism," "stakeholderism," and shareholder primacy. The latter view is represented by Milton Friedman's essay, "The Social Responsibility of Business Is to Increase Its Profits," which is summarized in the note. The note also includes a history of The Business Roundtable and its periodic statements on topics related to corporate governance, including its original 1997 "Statement on the Purpose of a Corporation." The note then relays the issuance of the 2019 update to that statement, along with reactions from the popular media, shareholder advocates, academics, and stakeholder governance advocates.