Ford and GM sign on to a new way of doing business

By CARSIFU | 20 August 2019


General Motors chairman and CEO Mary Barra (left) interacting with plant employees and managers in this April 2019 file pic.


WASHINGTON: The bosses of Ford and GM were among 181 CEOs who have pledged to move away from prioritising shareholders only but instead lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders.

Among signatories to the Business Roundtable's Statement on the Purpose of a Corporation were Ford's Jim Hackett and GM's Mary Barra.

Since 1978, Business Roundtable had periodically issued Principles of Corporate Governance. Each version of the document issued since 1997 had endorsed principles of shareholder primacy – that corporations exist principally to serve shareholders. With Monday’s announcement, the new statement supersedes previous statements and outlines a modern standard for corporate responsibility.

Ford president and CEO Jim Hackett.
Ford president and CEO Jim Hackett.


“This new statement better reflects the way corporations can and should operate today,” added Alex Gorsky, chairman of the board and chief executive officer of Johnson & Johnson and Chair of the Business Roundtable Corporate Governance Committee. “It affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders.”

“This is tremendous news because it is more critical than ever that businesses in the 21st century are focused on generating long-term value for all stakeholders and addressing the challenges we face, which will result in shared prosperity and sustainability for both business and society,” said Darren Walker, President of the Ford Foundation.

“CEOs work to generate profits and return value to shareholders, but the best-run companies do more. They put the customer first and invest in their employees and communities. In the end, it’s the most promising way to build long-term value,” said Tricia Griffith, President and CEO of Progressive Corporation.

Business Roundtable said: "Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity.

"While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country."

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