Back in 2019, 181 CEOs of the Business Roundtable issued a statement promised to deliver more corporate responsibility to communities. Some optimists declared it was the beginning of the end to the primacy of the share-holder.
But a study (pdf) by the Test of Corporate Purpose (TCP) initiative showed that amid 2020's disastrous public health, economic, social, and environmental challenges—the coronavirus pandemic, massive unemployment and worsening inequality, persistent police violence and racial injustice, and intensified climate crisis—"stakeholder capitalism" has failed to follow through to do more to benefit workers and communities, continuing to "put profits ahead of people" instead.
TCP's study, which was conducted with KKS Advisors and supported by the Ford Foundation, summarized it this way: "The interests of stockholders and other stakeholders will not always align." Their analysis showed that U.S. companies that signed the BRT statement "performed no better than their non-signatory counterparts through the 2020 crises."
Researchers pointed to stock buybacks, political spending, tax evasion, and unchecked pollution as additional examples of practices reflecting the continued prioritization of shareholder interests despite pledges to pursue "inclusive prosperity" for all stakeholders.
In the words of the report's authors, many companies still "campaign for one world while publicly proclaiming a vision of another."
The report noted that only a handful of the signatories to the BRT statement even submitted it to their companies for approval, which is why some scholars have argued that the promises made by proponents of "stakeholder capitalism" are a public relations gimmick that will not improve social welfare.
According to the New York Times reporter Peter Goodman, "The study enhances doubts that corporations can be depended upon to moderate their quest for profits to pursue solutions to challenges like climate change, racial injustice, and economic inequality."
Marjorie Kelly, executive vice president of The Democracy Collaborative, argued that the study noted: "Given the enormous influence major corporations have over the trajectory of policy and regulation, no analysis of corporate purpose and its alignment with a stakeholder primacy model would be complete without incorporating an evaluation of companies' lobbying and political spending activities," which often contradict the information coming from marketing departments. "Any talk of corporations being responsive to a broad spectrum of stakeholders is just that—talk—as long as stakeholders don't have power," said Kelly. "And power means ownership."
Economists Emily Kawano, former director of the Center for Popular Economics, and Julie Matthaei, co-founder of the U.S. Solidarity Economy Network, argued that profit-maximization is intrinsic to capitalism and the privately owned corporations that characterize it, so even the "stakeholder" variety is incapable of balancing moneymaking with competing objectives like greater equality and sustainability.