We Need a Business Revolution — and We Can’t Base It on the Kindness of CEOs
Jan 29 2020
Entrepreneurs and investors across the US and Europe see the need to redefine ownership and governance — so much so that a grassroots global movement is emerging to develop and support business models rooted in stakeholder governance.
As crises pile up around us — from climate change to income inequality — it’s clearer than ever that the way most businesses operate is a large part of the problem. Former US President Barack Obama recently suggested that labor unions work with “innovative companies who recognize that shareholder value and quarterly earnings are not the only thing that is important,” and even the corporate world is starting to recognize this way of thinking. But calls to “consider” the interests of all stakeholders or donate more money will not fix what’s broken.
These solutions ask us to rely on the kindness of CEOs. It doesn’t take a cynic to see why that might not work out. We need to fundamentally change the incentive structures for business leaders and investors. That means challenging the primacy of shareholder profits, yes; but also rethinking who controls and benefits from businesses. It means we need to stop treating labor and land as commodities to feed wealth accumulation for the lucky few. It means adopting new ownership models that position profit not as an end but as an engine for creating social, cultural and ecological goods.
Jasper is president and CEO of RSF Social Finance.