In a dramatic shift, America’s top CEOs last week said companies have a responsibility to society at large.
“This is a huge statement from one of the most influential groups in American business,” said Stuart Bunderson, Olin’s director of the Bauer Leadership Center and the George & Carol Bauer Professor of Organizational Ethics & Governance.
On August 19 the Business Roundtable issued an open letter titled “Statement on the Purpose of a Corporation.” One of the most powerful lobbies in the United States, the group represents American industry and includes the CEOs of companies from American Express and Apple to World Wide Technologies and Walmart.
The one-page declaration, with 181 signatures, ends as follows: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
Said Bunderson, “This statement really says something powerful about opening the door for those CEOs who want to think more broadly about the purpose of the enterprise.”
The Business Roundtable’s shift dovetails nicely with one of Olin’s key strategic pillars: values-based, data-driven decision-making. Bunderson and Seethu Seetharaman are teaching a new, related course at the school.
The Business Roundtable’s previous statement of purpose espoused economist Milton Friedman’s decades-old theory that a company’s only obligation is to maximize value for its shareholders.
The new statement says something very different, Bunderson noted in an interview last week. “It suggests that organizations should be thinking about all of their stakeholders, not just shareholders but also their suppliers, their customers, the communities in which they work,” he said.
‘The very first class they take’
This summer, Bunderson and Seetharaman taught values-based, data-driven decision-making to Olin’s nearly 100 first-year MBA students as the students launched their global immersion.
“This is the very first class they take,” Bunderson said. “We want to imprint them with this identity as values-based, data-driven decision-makers.”
First-year MBA student Hannah Levin said that before the students left St. Louis for Washington, DC, then Barcelona, Beijing and Shanghai, they spent a week “deep diving into what it means to make a decision balancing values and data.”
They reflected on what mattered to them individually, as a cohort and as an Olin community, she said.
“Starting our Olin experience with this course allowed us to gain an understanding of what brought each of us here and gave us the opportunity to challenge one another to think critically about our actions,” she said. What they learned “carried through our coursework and conversations for the rest of the summer.”
In January, Bunderson and Seetharaman will teach the course to part-time MBA students. Seetharaman is director of Olin’s Center for Analytics and Business Insights and the W. Patrick McGinnis Professor of Marketing.
“We need corporate leaders who can make decisions that incorporate a thoughtful consideration of both values and data,” Bunderson said.
“If leaders only attend to the data, they’ll make decisions that ignore key individual, organizational or societal priorities. If leaders only attend to values, they’ll make decisions that don’t fully consider business constraints and opportunities. You need both.”
File photo: Seethu Seetharaman, left, and Stuart Bunderson team up in a March 2019 workshop on values-based, data-driven decision-making.