Nearly two years ago, I wrote a post called Creating Lasting Shareholder Value By Creating Customer Value. This was the opening paragraph:
Are you responsible for maximizing or helping to maximize shareholder value? Are you tired of hit-or-miss actions and the annual or bi-annual cost reduction drill? Are you searching to identify the better way forward?
The better way is all about creating more value for your prospects and customers than your competition.
Many readers were skeptical about switching from focusing on creating shareholder value to delivering value to customers. But I kept beating the drum quietly with minimal visible results. But then something significant occurred on August 19, 2019. Let me tell you about the change.
Business Roundtable issued a new Statement on the Purpose of a Corporation on that important date. It was signed by 181 CEOs who commit to leading their companies to benefit all stakeholders – customers, employees, suppliers, communities, and shareholders.
But first, let me tell you what the Business Roundtable is. According to their website,
Business Roundtable is an association of chief executive officers of America’s leading companies working to promote a thriving U.S. economy and expanded opportunity for all Americans through sound public policy.
Some of the more recognizable members include:
- Jamie Dimon – Chair of Business Roundtable and Chair and CEO of JPMorgan Chase & Co
- Mary T. Barra – Chair and CEO of General Motors
- Marillyn A. Hewson – Chair, President, and CEO of Lockheed Martin Corp.
- Dennis A. Mullenburg – Chair, President, and CEO of The Boeing Company
In other words, the membership comprises some very serious business leaders.
From Business Roundtable’s press release:
“Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance and each version of the document since 1997 has endorsed the principles of shareholder primacy – that corporations exist principally to serve shareholders.”
Here are the five stakeholders the CEOs committed in the new document to working closely with:
- Customers – they will meet or exceed their customer’s expectations.
- Employees will compensate fairly, invest in employee education, and foster diversity.
- Suppliers – they will deal ethically with suppliers and be good partners.
- Communities – they will work closely with communities and protect the environment.
- Shareholders – they will generate long-term value and behave transparently and engagingly.
You can read the press release and the Statement on the Purpose of a Corporation here. The release also includes quotes from other business leaders, which in my opinion, expresses a degree of urgency rare from business leaders about such an intangible concept.
So, yes, this is an essential milestone in American business management. But it is also long overdue.
If you believe the same way I do about delivering value to customers, you should start your journey by reading the post I linked to at the top of this post.
Enjoy your journey since it will be exciting and memorable.
About Middlesex Consulting
Middlesex Consulting is an experienced team of professionals with the primary goal of helping capital equipment companies create more value for their clients and stakeholders. Middlesex Consulting continues to provide superior solutions to meet the needs of its clients by focusing on our strengths in Services, Manufacturing, Customer Experience, and Engineering. If you want to learn more about how we can help your organization deliver more value to customers, please contact us or check out some of our free articles and white papers here.