In collaboration with our survey research partner, The Harris Poll, we have been polling the American public on a regular basis to identify what matters most regarding companies’ initial responseto the COVID-19 pandemic, evolving priorities during the reopening and reset, and how to advance racial equity in the workplace in response to our national reckoning with racial injustice.
Timed with the one-year anniversary of the Business Roundtable’s landmark redefinition of corporate purpose, we asked the public how they believe companies are doing in shifting from a myopic focus on shareholders to better serving the needs of allstakeholders.
Here are the key insights, which we’ll further unpack below:
- 90% of Americans agree that it’s important for large companies to promote an economy that serves all Americans, and 58% say that large companies are doing well on follow-through – an increase of more than 10 percentage points from their evaluation of companies just one year ago.
- While eight in 10 Americans agree that large, public companies have a nearly equal responsibility to consider their impact on all their stakeholders, they don’t believe that those impacts are equally positive. 72% believe companies have a positive impact on shareholders, while only 47% believe companies have a positive impact on the financial well-being of workers, a significant gap between corporate responsibility and impact for this key stakeholder group.
Are large companies promoting an economy that serves all Americans?
In August of 2019, the Business Roundtable – comprising CEOs from some of the largest U.S. companies – redefined the purpose of a corporation to promote “an economy that serves all Americans” and declared, “Americans deserve an economy that allows each person to succeed through hard work and creativity to lead a life of meaning and dignity.” The statement was originally signed by 181 CEOs, and 220 as of this August, who have committed to lead their companies for the benefit of all stakeholders.
The action ushered in a year of debate around whether the business community had truly shifted its priorities to abandon shareholder primacy in favor of shareholder capitalism. So 12 months after the announcement, JUST Capital, in collaboration with The Harris Poll, revisited one of our survey questions from last year to gauge the public’s thoughts about whether America’s biggest companies have indeed translated their commitments into action.
We reached out to 2,000 Americans and found that about 90% of respondents agree it is important for large corporations to build an economy that works for all Americans, and that
58% believe large, public companies are doing well walking the talk – even better than they were one year ago, by a margin of about 14 percentage points. 63% believe large companies are doing well in “building an economy that allows each person to succeed through hard work and creativity,” and 60% believe large companies are doing well in “building an economy that allows each person to lead a life of meaning and dignity.”
From our ongoing COVID-19 polling, we know that a majority of survey respondents (58%) believe America’s largest companies have been showing leadership throughout the COVID-19 pandemic. And our partners at The Harris Poll recently found that 72% of Americans “trust companies more than the Federal government to help find solutions to issues related to the COVID-19 pandemic and racial equality movement.” These positive perceptions around corporate responses to the biggest issues of 2020 are most likely factoring into the positive perception increases this year. Still, Americans believe that large companies clearly still have some work to do, as only about one in five think corporations are doing very well in executing on these principles.
See our related analyses, also released today, that demonstrate how the signatories to the Business Roundtable’s purpose statement are responding to the pandemic as well as prioritizing racial equity in the workplace.
Is there a gap between corporate responsibility and impact?
In the year since the Roundtable declared a shift away from shareholder primacy, stakeholder capitalism has clearly taken root in the minds of most Americans, with about eight in 10 agreeing that large, public companies have a nearly equal responsibility to consider their impact on all their stakeholders.
Yet when we look at the positive impact of companies on those same stakeholders, the perception is that shareholders reap the lion’s share, while other stakeholders lag behind, especially communities, workers, and the environment.
It’s clear that corporations have work to do to close the delta between their expected responsibility to all stakeholders and their impact on those stakeholders, most critically when it comes to the environment and workers’ financial well-being. There is a 36 percentage point gap between responsibility for and positive impact on the environment, a 35 percentage point gap between responsibility for and positive impact on the financial well-being of workers, and a 26 percentage point gap between the responsibility for and positive impact on the health of workers.
Regarding JUST’s most important stakeholder – workers – it is interesting to note that while 56% of Americans believe that companies are having a more positive impact on the health of their workforce, only 47% believe that companies are having a positive impact on the financial well-being of workers, especially the lowest-paid.
And when we look specifically at perceptions around negative impact, the environment is highest with 37% of Americans agreeing that large companies have a negative impact on the environment. 32% believe companies have a negative impact on the financial well-being of workers, and 24% believe they have a negative impact on the health and well-being of their workforce.
Stay tuned on this front as well, as JUST Capital and The Harris Poll will be tracking how companies are doing in closing this stakeholder support perception gap in the months ahead.