In August, almost 200 leading business executives—including Amazon CEO Jeff Bezos, Apple CEO Tim Cook, JPMorgan Chase CEO Jamie Dimon, and IBM CEO Ginni Rometty—made news headlines by offering a new definition for the purpose of a corporation that challenged long-held corporate orthodoxy.
These chief executives, collectively known as the Business Roundtable, argued that the modern corporation should no longer exist only to deliver value to stockholders, as it plainly stated in 1997—rather, it should serve stakeholders including customers, employees, partners, communities, and yes, shareholders.
“Each of our stakeholders is essential,” reads a rather concise statement signed by 181 of the Business Roundtable’s 193 members. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
It didn’t take long for questions to emerge: Were the CEOs violating their fiduciary duty by embracing a broader mandate? And just how the hell were they going to measure their success, anyway?
The jury is out on the first point, but already, progress on the second: JUST Capital, a non-profit organization started by hedge fund billionaire Paul Tudor Jones, has been working for years to develop a methodology for evaluating corporate performance on stakeholder issues. The firm has exclusively shared with Coins2Day its “stakeholder scorecard” for Business Roundtable signatories, and it appears that the CEOs are, by and large, walking the walk—not just talking the talk. (It will publish the complete scorecard on its website Tuesday.)
According to JUST Capital’s findings, 34 of the 181 signatories of the new Business Roundtable statement rank among the top 100 companies it measures for stakeholder performance, including Apple, Salesforce, Anthem, P&G, Cisco, GM, IBM, AT&T, Accenture, and Xylem. (JUST Capital annually measures and ranks companies in the Russell 1000, so its analysis in this context is limited to 134 of the 181 total signatories.) That number jumps to 68 signatories if you expand the scope to the top 200 companies it measures. Expand it even further, to JUST Capital’s top 400, and more than 100 signatories pass muster.
“Business Roundtable signatories on average are performing quite well relative to their peers,” the firm’s founding CEO Martin Whittaker tells Coins2Day. Still, “on both a collective and an individual company basis there’s still plenty of opportunity to do more.”
Which stakeholders are Business Roundtable signatories collectively serving best? According to the survey, the roundtable companies outperformed Russell 1000 peers by double-digit percentages when it comes to matters concerning employees, the environment, the community, and shareholders. (Customers, on the other hand, are served about the same.) JUST Capital looked at a range of issues concerning each stakeholder group, from fair pay and ethical leadership to inclusion and pollution.
And how did specific companies do? Apple led the Business Roundtable pack with the best all-around score (and was the leading corporation in the environment category), followed by business software company Salesforce (which was also the employee category leader) and health insurer Anthem (the shareholder leader). Elsewhere, automaker General Motors and business technology provider IBM were neck-and-neck at Nos. 6 and 7, respectively. Meanwhile banking giant JPMorgan Chase finished at No. 26 and retailer Amazon clocked in at No. 28.
Here’s a look at the top five Business Roundtable signatories overall as well as within each stakeholder group. For more information on how dozens of other companies scored, visit JUST Capital’s website:
Top 5 all-around: Apple, Salesforce, Anthem, P&G, Cisco
Top 5 for employees: Salesforce, Cisco, P&G, BlackRock, Raytheon
Top 5 for community: Walmart, CVS, UPS, Target, FedEx
Top 5 for customers: Apple, UPS, Caterpillar, P&G, Whirlpool
Top 5 for environment: Apple, Goldman Sachs, MetLife, Xylem, Target
Top 5 for shareholders: Anthem, GM, Lockheed Martin, Owens Corning, Alliant
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