About
Just over 50 years ago, Milton Friedman declared that a business’ primary responsibility is to it’s shareholders. Maximize profits and return to them, and the business will be fulfilling its highest calling.
That philosophy was groundbreaking in its elegant and simple declaration. And it has worked effectively at creating wealth… but only for the investor class.
It has been a disaster for the middle class, large sections of the working class, employees, communities, and the environment. Since 1978, the ratios of average pay for CEOs to workers has exploded from 30:1 (1978) to 400:1 (2018)*. Over roughly that same period, CEO pay has increased by 940%, while worker pay has only risen just 12%.
American capitalism is the greatest force for good on the planet. Full stop. But any force left unfettered and unfocused will lose its best and highest purpose, and can do more harm than good.
What we need is for business leaders in the U.S. to unleash the transformational power of capitalism using innovation, strategy and the full complement of their team’s talent and purpose to positively affect every stakeholder their business touches.
That is stakeholder capitalism.
And countless examples show this approach is more profitable, improves employee retention, reduces negative impacts to the environment and their community, creates competitive advantages, and makes a business more sustainable and valuable long-term.