Weatherhead Faculty Comment on the Changing Role of Business

Professors Chris Laszlo and Rob Widing comment on the recent U.S. Business Roundtable statement on the purpose of a corporation. They argue that replacing “shareholder primacy” with a stakeholder-centric view of business is a historic milestone. While it will be important to have concrete evidence that the 181 signatory companies are “walking the talk” of stakeholder value, two factors give currency to the BRT statement. The first is that it reflects new market realities in a radically more complex world in which rising expectations and increased transparency are giving many stakeholders unprecedented influence on business outcomes. The second concerns the power of words. Dominant narratives shape the way we think, the way we educate young people, and how we behave. As Weatherhead colleague Ron Fry says, "words create worlds". There is enormous power in the dominant story we tell ourselves about the role of business. On this score the BRT statement offers a radically different narrative about the role of business for the first time in 50 years.

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