On Aug. 19, 2019, the influential Business Roundtable , an association of close to 200 CEOs of major US corporations, formally abandoned its long-standing advocacy of shareholder wealth maximization as the main purpose of business corporations in favor of a new Statement of Purpose of the Corporation .
Over a year later, 26 of the largest business and professional organizations in the Philippines, collectively known as the Philippine Business Groups signed a Covenant for Shared Prosperity by which they upheld the universal issues of economic and social inequality and noninclusivity by ensuring “ethical wealth creation and the sharing of prosperity with all stakeholders.”
If business is to implement socially beneficial initiatives and at the same time achieve its long-run strategic goal of maximizing shareholder wealth, it has to radically change the manner in which it does business. In particular, it needs to rethink the way it pursues its profit objective. Following this line of reasoning, we propose the following business strategies for efficiently appropriating economic value to the non-owner stakeholders of the firm:
ʎ Create value for business partners by engaging suppliers and distributors in a mutually beneficial and trusting collaborative relationship.