The New Corporate Chivalry

In what appears to be a repudiation (at least in part) of corporate orthodoxy going all the way back to the 1970s, the Business Roundtable, a group of CEOs from some of the country’s largest corporations, has released a new statement that demotes “delivering shareholder value” from the marquee and instead implores companies to consider the welfare of all stakeholders who may be impacted by the decisions of leadership. In this new vision proposed by Business Roundtable, the consideration of shareholder needs now comes in fifth place behind the needs of customers, employees, suppliers, and the environment.

This is a tall order, and we at Chromium are at least a little skeptical that signatory corporations like Exxon and Duke Energy will be able to meet the environmental challenge, or that notoriously ruthless operators like Amazon and Walmart will build equitable relationships with their suppliers. Still, we’re willing to give them the benefit of the doubt, because if nothing else it’s clear that these leaders are suddenly and very publicly recognizing the things we’ve been saying for years: That leaders need to “Live the Brand” — our version of walk the walk, in order to make such statements authentic and believable.

Business Roundtable’s new commitments echo our Brand-Leadership Nexus framework, which we developed several years ago to help leadership operationalize a company’s brand through their decisions, communications, and culture. The four quadrants of the Brand-Leadership Nexus are Vision, Alignment, Aliiances, and Stewardship — concepts that are clearly reflected in this new statement:

While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders. We commit to:

- Delivering value to our customers. We will further the tradition of American companies leading the way in meeting or exceeding customer expectations.

- Investing in our employees. This starts with compensating them fairly and providing important benefits. It also includes supporting them through training and education that help develop new skills for a rapidly changing world. We foster diversity and inclusion, dignity and respect.

- Dealing fairly and ethically with our suppliers. We are dedicated to serving as good partners to the other companies, large and small, that help us meet our missions.

- Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses.

- Generating long-term value for shareholders, who provide the capital that allows companies to invest, grow and innovate.

We are committed to transparency and effective engagement with shareholders.

Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.

The real question is, do US companies even have the right tools to operationalize ‘An Economy that Serves all Americans’? We’d like to think that some of the more culturally savvy companies that Chad has worked with such as Ancestry, Salesforce, and Bain do, as do companies with storied cultures such as Everlane, Patagonia, Intuit, Zappos, and others we’ve read about or seen on “Great Places to Work” lists. But, corporate and shareholder culture is a mighty ship that turns very, very slowly.

For example, we’ve met several thoughtful executives who feel the tension between hitting their quarterly numbers, but have little time or support to develop and invest in long-term, sustainable strategies let alone a shareholder mandate to devote resources towards creating an economy that “serves all Americans.”

And yet, the change that BR’s commitments point to, are based upon what are often derisively called soft skills — a misnomer in that these are the difficult to master skills upon which innovations are built — not the other way around. Not surprisingly, there is an entire global industry geared towards supporting sustainable business practices like:

• building cultures with high degrees of psychological safety
• creating brands that attract customers through Mission, Vision, and Values
• acting on diversity and inclusion gaps
• sustainable material use
• transparent supply chain data

This industry has grown quietly over the past 30 years, waiting for corporate leaders to hear its calling. We’re happy they’ve finally perked up their ears.

Tony Wessling is co-Founder and Managing Partner of Chromium, and Chad Stose is the firm’s Principal for Leadership & Culture.