Value Workers as Much as Shareholders
Corporations need to take a much more holistic view of what ultimately adds to their bottom lines.
Warren and others say corporations have social responsibilities, too.
Photographer: Ethan Miller/Getty ImagesOnce again, we’re debating the purpose of corporations. On one side, progressives such as Sen. Elizabeth Warren argue that companies — given broad rights in court decisions such as Citizens United v. Federal Election Commission — must also accept broad social responsibilities such as paying attractive wages and protecting the environment.
On the other side are many corporate leaders and business school professors (who train future leaders), who continue to believe in the Business Roundtable’s position in 1997 that “the principal objective of a business enterprise is to generate economic returns to its owners.” Such views echo free-market economist Milton Friedman, who emphasized nearly half a century ago that a business has only one responsibility, to maximize shareholder value.