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1 results

  • 9 - Why Did the Business Roundtable CEOs Shift Their Position?

  • from Part II - The Merits
  • Stephen M. Bainbridge, University of California, Los Angeles
  • Book:
    The Profit Motive
    Published online:
    02 February 2023
    Print publication:
    09 February 2023, pp 105-124

  • Summary

    The 2019 shift in position by the Business Roundtable CEOs from their traditional embrace of shareholder value maximization to stakeholder capitalism attracted enormous attention. Oddly, however, the CEOs offered nothing but platitudes to explain their shift. This chapter explores possible explanations for their shift. Were the Business Roundtable CEOs woke? It is true that CEO activism leans left but the profit motive survives. Were the Business Roundtable CEOs responding to changes in consumer, investor, and labor demands? Were the Business Roundtable CEOs responding to Green Activist Investors? Were the Business Roundtable CEOs trying to fend off regulation? Were the Business Roundtable CEOs just cynical oligopolists? All of these prove possible but unlikely explanations. Two more plausible explanations are that the Business Roundtable CEOs were pining for the days of Imperial CEOs, because stakeholder capitalism inevitably means that CEOs are less accountable, and that the Business Roundtable CEOs were greenwashing.