StashLearn
Get the app
Get the app

Join millions of investors on Stash

Investing, simplified

Start today with as little as $5
Get the app
Money News

What’s the Business Roundtable and Why Does It Want to Change Capitalism?

August 22, 2019

3 min read

From Walmart to General Motors (GM), the primary goal of the biggest U.S. businesses has often been to pursue profits.

But perhaps not anymore.

The chief executives of the leading corporations in the U.S. released a new set of standards, through an organization called the Business Roundtable, about how they propose to operate their businesses in the future. And from now on, people, suppliers, communities, and the environment will allegedly come first.

“The American dream is alive, but fraying,” Jamie Dimon, chairman and CEO of JPMorgan Chase, and chairman of the Business Roundtable, said in a press release. “Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”

Why is this important?

What’s different this time?

What is the Business Roundtable?

Founded in 1972, the Business Roundtable is a pro-business public policy and lobbying group that represents the interests of the largest U.S. corporations, which collectively employ 15 million people, and produce $7 trillion in annual revenue, according to the group.

Who signed the statement?

Nearly 200 CEOs, including:

Why now?

The heads of the largest U.S. companies may realize that times are changing, and they need to be more inclusive of people beyond shareholders and other owners, according to experts.

For example, executive pay and the increasing wealth gap between the richest and poorest U.S. citizens has been the topic of conversation from pundits to politicians in recent years, and particularly as the country gears up for the next presidential election.

Since 1978, the average CEO salary has increased 940%, according to the Economic Policy Institute, a labor think tank. Over the same time period, the wages of average U.S. workers have increased only 12%. The average CEO pay at a large company was $17.2 million compared to $56,000 for the average worker nationally.

Companies have also grown more sensitive about how the products they produce actually get made, and have grown more aware of the potential mistreatment of workers, particularly in emerging economies.

There is a growing realization that supply chains must be transparent, and that in order for capitalism to be sustainable, treatment of people matters, according to experts.

Additionally, global warming, and the role of business in producing carbon emissions that contribute to the heating of the planet, has become a top issue.

By Jeremy Quittner
Jeremy Quittner is the senior writer for Stash.

Next for you
Johnson & Johnson’s Asbestos Problem: Do Companies Have Ethical Obligations?

Investment Profile

Bonds Worldwide

An International Bond ETF on Stash

Learn more
Explore more articlesChoose a topic to learn more about
Retirement Careers budgeting love and money market news
Disclaimers

This material has been distributed for informational and educational purposes only, represents an assessment of the market environment as of the date of publication, is subject to change without notice, and is not intended as investment, legal, accounting, or tax advice or opinion. Stash assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Furthermore, the information presented does not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance. There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services, and should seek advice from an independent advisor before acting on any information presented. Before investing, please carefully consider your willingness to take on risk and your financial ability to afford investment losses when deciding how much individual security exposure to have in your investment portfolio.

Past performance does not guarantee future results. There is a potential for loss as well as gain in investing. Stash does not represent in any manner that the circumstances described herein will result in any particular outcome. While the data and analysis Stash uses from third party sources is believed to be reliable, Stash does not guarantee the accuracy of such information. Nothing in this article should be considered as a solicitation or offer, or recommendation, to buy or sell any particular security or investment product or to engage in any investment strategy. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. Stash does not provide personalized financial planning to investors, such as estate, tax, or retirement planning. Investment advisory services are only provided to investors who become Stash Clients pursuant to a written Advisory Agreement. For more information please visit www.stashinvest.com/disclosures.