Business Roundtable opinion on the role of business in society: what’s new?

Debates about the role of business in society remain lively, although the proponents of the doctrine according to which only the maximization of shareholder value should matter are less and less audible. Indeed, their arguments are harder and harder to convince at a time when the harmful effects of management and management practices associated with shareholder value creation alone are more obvious every day (excessive focus on short-term performance to the detriment of long-term performance). , minimalist perception of the company’s contribution to its ecosystem and to society, excessive financialization of strategies, etc.)

In this context, the recent Pacte law calls on French companies to redefine their performance and the means used to achieve it. For a narrow view of their role in society, many organizations are now resisting, by implementing it, a more global vision that integrates their social and environmental impacts. Danone, which had been a pioneer in operationalizing the concept triple bottom line (an assessment of performance on the three complementary dimensions economic, social and environmental), no longer stands out so much today on this point from many other companies that have subscribed to a more responsible vision of their activity and performance.

New relationships with their partners, who are customers, suppliers, even competitors, are thus experienced, in line with the idea of ​​economic peace that some researchers call for.

On the other side of the Atlantic, the recent statement in favor of “stakeholder capitalism”, signed on August 19 by 181 CEOs of the largest US companies, including the heads of Apple, Boeing, Johnson & Johnson, Amazon and even JPMorgan Chase, on same way. .

“The 2 missions of the company: 2 versions of capitalism”, Olivier Sibony, professor associated with HEC (Xerfi channel, September 2019).

Influencing public policy choices

It was in 1972 that John Harper, CEO of the Alcoa Group, and Fred Borch, CEO of General Electric, created the “Business Roundtable”, bringing together the leaders of the largest American companies (211 members today) . The stated goal was then to make their voices heard in the public debate at a time when citizen hostility toward big business was beginning to emerge and when federal labor regulations were perceived as a danger.

Excerpt from “Consumer Protection Act Memo” of 1977.

It is this organization that has amply demonstrated its effectiveness in the past by significantly influencing American decisions and public policies (which notably contributed as its first weapon to the failures of the antitrust bill in 1975 and the creation of a consumer protection agency in 1977), which caused a sensation by publishing a text that seemed particularly subversive on the other side of the Atlantic, where the primacy of shareholders is less spontaneously questioned.

Signatories commit to “deliver value to their customers”, “invest in people”, “treat suppliers fairly and ethically”, “support the communities in which they work”, “protect the environment” and to “create long-term shareholder value” .Nothing really new in terms of what has been advocated since the 1970s by stakeholder theory, or more recently the concept of “attentional symmetry”.

Nor anything new in terms of the practices of companies that are several hundred years old (known as “Henokiens”), which, and this is undoubtedly the key to their sustainability, have always been able to work for all their stakeholders without ever to sacrifice some of them. .

While a virtuous circle can exist between profitability (a measure of shareholder value creation) and competitiveness (a measure of customer value creation), enabling the dynamics of resilience and sustainability, a vicious circle can also exist. outweighs other perceptions of performance.

Thus, many companies sinking into the pitfalls of “quarterly capitalism” have disappeared for lack of having been able to moderate opportunities to improve short-term profitability to the detriment of investments that prepare for competitiveness and future profitability.

Because here it is precisely the nature of the choice to be made: are we able to give up some short-term profitability in order to improve competitiveness, establish sustainability and undoubtedly create more profitability in the longer term? Knowing the excesses of short-termism, there are many managers who, in a very utilitarian way and without showing signs of philanthropy, have understood where their interest and that of their company lies.

A limited ambition

Finally, the ambition of the declaration of 19. August limited and not very innovative at a time when global warming undoubtedly requires responses of a completely different order (drastically reducing our environmental footprint, developing solidarity with migrants climate change etc. So many solutions not provided in the recent declaration , for which this is clearly not the purpose, and which ultimately encourages a slight strengthening of attention to stakeholders). However, the commitments made have the advantage of involving world-class players who have so far been only marginally involved, although some are already doing more than they promised.

If the actions are there, the potential for the diffusion of the principles adopted throughout the economy, especially among SMEs, will be significant, we can nevertheless hope. In fact, the goals of large listed companies tend to have quick and strong consequences for ETIs, SMEs and VSEs, which, embedded in value chains driven by large companies, find themselves exposed by the latter to evolving performance designs. proven, for example, by the work of the American sociologist Gary Gereffi.

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