Debates about the role of the corporation in society remain lively, even as proponents of the doctrine that only maximization of shareholder value should matter is becoming less and less audible. Indeed, their arguments are increasingly difficult to convince at a time when the detrimental effects of management and management practices associated with creating value only for shareholders are becoming more apparent every day (excessive focus on performance term at the expense of longer term performance, minimalist view of the company’s contribution to its ecosystem and to society, excessive financialization of strategies, etc.)
In this context, the recent Pacte law invites French companies to redefine their performance and the means used to achieve it. Many organizations are now opposing a narrow view of their role in society, by implementing it, against a more global view, integrating their social and environmental impacts. Danone, who had been a pioneer in operationalizing the concept of triple bottom line (an assessment of performance on the three complementary dimensions of economic, social and environmental), today it does not differ so much from many other companies that have subscribed to a more responsible view of their activity and performance.
New relationships with their partners who are customers, suppliers and even competitors are thus experienced, in keeping with the idea of economic peace that some researchers are asking for.
Across the Atlantic, the recent statement in favor of “stakeholder capitalism” was signed on August 19 by 181 CEOs of the largest American companies, including the leaders of Apple, Boeing, Johnson & Johnson, Amazon and even JPMorgan Chase. , in the same line .
Influencing policy choices
In 1972, John Harper, CEO of the Alcoa Group, and Fred Borch, CEO of General Electric, created the “Business Roundtable” businessroundtable.org/, bringing together the leaders of the largest American companies (211 members today). The stated goal, then, was to make their voices heard in the public debate at a time when citizen animosity towards big business was beginning to emerge and federal labor market regulation was seen as a danger.
It is this organization that has more than proved its effectiveness in the past by significantly influencing US decisions and government policy (notably by contributing to the failure of the antitrust law in 1975 and the establishment of a consumer protection agency in 1977) who caused a stir by publishing a text that seemed particularly subversive on the other side of the Atlantic, where the primacy of shareholders is less spontaneously questioned.
Signatories pledge to “deliver value to their customers,” “invest in people,” “treat suppliers fairly and ethically,” “support the communities in which they operate,” “protect the environment,” and “promote long-term shareholder value.” to generate” . Nothing really new about what has been advocated by stakeholder theory since the 1970s, or, more recently, the concept of “symmetry of attentions”.
Also nothing new regarding the practices of multi-year companies (known as “Henokiens”) who, and this is undoubtedly the key to their sustainability, have always been able to work for all their stakeholders, without sacrificing a few.
While there can be a vicious circle between profitability (a measure of shareholder value creation) and competitiveness (a measure of customer value creation), enabling the dynamics of resilience and sustainability, a vicious circle can also develop. outweighs other conceptions of performance.
So many companies sunk in the shortcomings of “quarter capitalism” have disappeared because they were unable to dampen the ability to improve short-term profitability at the expense of investments prepared for competitiveness and future profitability.
Because here, very concretely, it’s the nature of the choice: are we able to give up a little short-term profitability in order to improve competitiveness, achieve sustainability and undoubtedly generate more long-term profitability? Aware of the excesses associated with short-term thinking, many are the leaders who have understood, in a very utilitarian way, and without showing any philanthropy, where their importance lies, and that of their company.
A limited ambition
Finally, the ambition of the August 19 declaration seems limited and not very innovative at a time when global warming undoubtedly calls for responses of a completely different order (drastic reduction of our ecological footprint, development of solidarity with migrants climate change , etc. So a lot of solutions that the recent statement doesn’t offer, where this is clearly not the goal and which ultimately leads to a slight increase in stakeholder attention). However, the commitments made have the merit of involving world-class players who have been little involved until now, even if some are already doing more than they promised.
When the actions are in place, the potential for dissemination of the adopted principles throughout the economy, especially among SMEs, will be significant, but we can hope. Indeed, the objectives of large publicly traded companies often have a rapid and strong repercussion on ETIs, SMEs and VSEs which, integrated into value chains driven by large companies, find themselves subjected by the latter to evolving performance designs, as illustrated for example by the work by American sociologist Gary Gereffi.