Martin Whittaker
- In August 2019, 181 CEOs said the goal of a company wasn't just to make profit, but to help society.
- Two years later, JUST Capital polled Americans on how they view CEOs.
- The survey found most Americans think CEOs are helping society.
- See more stories on Insider's business page.
Two years ago, the business world's view on capitalism took a decisive turn. 181 CEOs – including JP Morgan's Jamie Dimon, Apple's Tim Cook, and Walmart's Doug McMillon – embraced "stakeholder capitalism." In a public letter, the leaders wrote that their companies exist to "benefit all stakeholders – customers, employees, suppliers, communities and shareholders."
The CEOs who signed the letter are part of the Business Roundtable, an association that discusses and advocates for policies they believe will benefit American business. The group's first statement of purpose was to reject "shareholder primacy," an economic theory popular since the 1970s that states a company's sole purpose is to generate profit for shareholders.
But does the public feel companies are following through on their renewed sense of purpose? The Harris Poll and Just Capital, an independent research firm, polled over 2,000 Americans and found that the majority of Americans think companies are doing a good job when it comes to serving society. In 2019, 45% of respondents said that CEOs are creating an economy that serves all Americans. That number has since jumped to 65% in 2021.
"I think this data is recognition of the positive role many companies have played and the prominence of CEOs during the tumultuous period of 2020," Martin Whittaker, CEO of JUST Capital, told Insider. "We talk to a lot of business leaders, I do believe that CEOs, for the most part, are trying to do more."
The coronavirus pandemic and the murder of George Floyd contributed to the uptick, Whittaker said. After Floyd's death, executives spoke out on racial justice and pledged to double down on promoting diversity, equity, and inclusion for their employees and customers. JPMorgan Chase and other financial giants pledged billions of dollars to help underserved communities.
At the same time, executives realized how many workers were struggling to make ends meet when businesses shut down or hours were reduced due to the pandemic. Many leaders added new benefits, raised wages, or donated to community centers. CEOs were expected to help care for their workers and the communities in an unprecedented way.
As JPMorgan's Dimon previously told Insider, "Watching the events unfold after George Floyd's murder, we understood that we, as a company, could do more to serve and lead. It was a moment when many companies had to decide or recommit to what they stood for."
That sense of urgency felt by CEOs to help lead not just companies but society continued well past June 2020. In May of this year, HP, Salesforce, and other major companies spoke out against restrictive voting bills and laws in Georgia, Texas, and other states.
A 2019 survey by the Brunswick Group, a corporate-leadership firm, of about 2,000 US employees found that over 50% of workers said they identified a leader's stance on social issues as an important consideration when weighing a job change or joining a new employer.
"I think this time of crisis in 2020 showed the role of human beings in business," Whittaker said. "CEOs realized this time wasn't about memos or statements, it was about deeds. We've seen companies do things differently."
Whittaker pointed to an increase in board diversity across many companies, the NASDAQ's recent addition of rules requiring companies to have diverse boards, and increased investor proxies urging diversity, equity, and inclusion.
"I'm very optimistic," he said. "If I felt this was really just for show, I would be disillusioned. But I don't sense that."
While many Americans see progress in how CEOs are impacting society, most still think that companies are serving shareholders more than they are serving employees, communities, or the environment, the survey found.
"From our research, Americans want CEOs to invest more in their workers, pay a livable wage, invest in upward economic mobility," Whittaker said. "We're in a show me world, show me what actions you're taking."