Purpose - what is the purpose of a business?Submitted by Bond & Devick Wealth Partners on September 16th, 2019
On August 19th, a group representing many of the nation’s most powerful business executives refuted economist Milton Freidman and the idea of pursuing corporate profits at any price. This group, called the Business Roundtable, is comprised of 192 CEO’s of American companies who stated they will no longer focus solely on creating wealth for their shareholders. Alternatively, Jamie Diamond (CEO of JP Morgan Chase & Co.) wrote, “Americans deserve an economy that allows each person to succeed through hard work and creativity and to lead a life of meaning and dignity”. Instead of focusing solely on profits for shareholders, these CEO’s believe corporations should promote the well-being of all stakeholders, including employees, suppliers, customers, the environment and the communities in which their companies operate.
Bond&Devick welcomes this change in culture and hopefully a change in corporate behavior. As the founders of the certified B Corporation movement noted, “We operate with a better model of corporate governance—benefit corporation governance—which gives us a better way to combat short-termism and the freedom to make decisions to balance profit and purpose”.
The CEO of Patagonia (one of the nations most recognized B-Corps), Rose Marcario, had a pointed response to the way many corporations are run, “We’re living in a world where business is responsible for more than 60% of the pollution of our air and our water and our land, and yet businesses take very little responsibility. I think what the B Corp community does is brings together these like-minded companies to be a greater force for good in the world. … This idea that business is somehow bifurcated from the rest of life, it has no responsibility to the environment, it has no responsibility to social good is total bullshit. It’s a totally outdated way of thinking about the world. It’s one of the things that really gives me hope about this [B Corp] movement, because not only does it provide a legal structure, which didn’t exist before… but it also provides a community and a legitimate certification process.”
Bond&Devick became a certified B Corp several years ago because we do our best to balance the needs of our employees, our clients and our community in our pursuit of profits. We could increase our short-term profits by paying our employees less, charging our clients more and not engaging with our community. However, we believe treating all our stakeholders fairly will continue to provide us with a sustainable, profitable business for many years to come. We relish being a force for good and for change.
The Bond&Devick Team