Dive Brief:

• Last week, 185 CEOs and company chiefs signed a "Statement on the Purpose of a Corporation," a 300-word document detailing their priorities on business and corporate purpose.
• The statement, signed by Amazon's Jeff Bezos, Apple's Tim Cook and Coca-Cola​'s James Quincey among others, argued companies should prioritize the interests of shareholders, employees and suppliers rather than only shareholder value.
• The Business Roundtable is a group of nearly 200 CEOs of major U.S. corporations formed in 1972 to promote pro-business public policies. Although each company "serve[s] its own corporate purpose, they share a "fundamental commitment to all their stakeholders," not just prominent ones, the statement said.

Dive Insight:

Jamie Dimon, chairman and CEO of JPMorgan Chase and chairman of the Business Roundtable, initiated the rewriting of the cohort's purpose last year, The New York Times reported. "The [statement] is significant, but not really surprising," Troy Keller, a corporate governance attorney with Dorsey & Whitney, wrote in an email to CFO Dive.

"CEOs [want] greater flexibility to invest long-term and to focus on the interests of all their stakeholders, including employees and customers and the communities in which they operate," Keller wrote. With a sizable group of shareholders expressing concern and priorities in areas such as environmental protection, "it empowers CEOs to take back some degree of flexibility, and we are seeing that in this announcement," he said.

The statement, focusing on companies' collaborative "purpose," is an attempt to redefine the role of big business within society, shifting how they are perceived by what the Times called "an increasingly skeptical public." But the statement, while espousing a belief in "fair and ethical" deals with suppliers and support of environment- and community-based activism, didn't provide concrete specifics.

Nancy Koehn, a historian at Harvard Business School, said the statement was written out of a perception that "business as usual is no longer acceptable," but she questioned whether business practices will actually change, the Times reported.

Along with its commitment to shareholder interests, the statement presents a C-suite composite question about the ways in which a company should drive growth, including the role of each executive. Traditionally, the CEO leads the pack, driving business opportunities, while the CFO charts the course on financing company initiatives and accounting for success, the CMO determines how to message value to clients they seek to serve, and the CIO ensures safety and reliability in the technology that enables all of these elements to work together. 

The statement does not challenge the long-held belief that a business's primary responsibility is to increase profits for its shareholders, but it introduces a pivot — to deliver quality to customers and create ethical pragmatism with suppliers. Finance executives may take note that while turning a profit is integral, so too is maintaining the relationship with the employer, the supplier and the community.