In August, nearly 200 CEOs of Americas largest companies declared their companies exist for the benefit of all stakeholders— customers, employees, suppliers, communities and shareholders. This collection of CEOs, the lobbying group the Business Roundtable, rejected the idea that maximizing shareholder value at all costs will take care of everything else.
Their statement was not legally binding, but even if it ends up merely symbolic, it marks a significant shift in the conversation. Since the beginning of last year, Business Insider has been exploring the momentum behind this shift — why we need Better Capitalism, as we call it, and how we can achieve it.
Our series started with the rejection of the shareholder primacy theory that grew in popularity in the late 1970s and became the norm beginning in the 80s. That theory led to a short-term focus on profits above all else, and were arguing that this has come at the expense of other stakeholders, and has been a significant factor in the countrys out-of-control wage-and-wealth inequality.
Weve found that there is an increasingly loud call to tie profits to purpose, and its not just a moral argument. To make sense of where we are today and where we should be headed, weve gathered some of our favorite books on the economy and the role of business in society. This is an updated version of a story that ran on March 16, 2019.