When Did the Purpose of Business Change?

I recently signed a letter to Larry Fink, the chief executive officer of BlackRock, Inc., taking issue with some of his statements about the purpose of corporations.

There has been much talk in the business press lately about the shift from “shareholder” capitalism to a “stakeholder” capitalism that takes into account the interests of customers, employees, and the other stakeholders in addition to the interests of the investors. When I read about the shift, my immediate reaction was, “When did it change?”

I obtained my first management position more than 50 years ago. Since then I have been a location manager in a restaurant chain, middle manager, executive and chief executive of both public and private companies. I have always believed American companies are stakeholder-centric. Certainly, the best ones are focused that way. That is what 50 years in business has taught me.

Let me explain. From the beginning, as a location manager, I learned I had an obligation to the staff to identify talent then nurture that talent to achieve the results required. Delivering on our promise to the customer was essential. I understood that our vendors were our partners and their success was important to our success. I saw how we were connected to our community through our interaction with local health departments, building, fire, and other government agencies. Charitable endeavors were part of that connection as well.

So, what could this effort to move our companies to a form of “stakeholder capitalism” be all about? If I am right—and my experience tells me I am—there is something else at play here.

“Sustainability” often is cover for an extreme environmentalist agenda, such as that promoted in the Green New Deal. I do not know anyone opposed to clean water, clean air, or a safe food supply. I just know people who have different ideas on how to address these issues. My biggest concern is that Fink’s alleged “stakeholder capitalism” is really just about a political agenda, which is the real goal.

A business driven by offering quality products and fair prices serves a wide audience. Businesses driven by a political agenda limit the benefits offered to those who agree with that political agenda. American free markets are the most efficient and best method for delivering societal change. They empower consumers to make choices about what they want and what they are willing to pay for it.

If people truly are interested in improving society and providing opportunity for the greatest number of people, free enterprise is the way to achieve it.

Let’s keep business making widgets or providing services that are in demand. Let’s have business leaders continue to balance the various constituencies they serve. Let’s get the power-seeking bullies out of our system and let free enterprise do what it has always done: advance our society.

About Keith E. Sirois

Keith E. Sirois is the President and Chief Executive Officer of Capital Management HPP, Inc. He is the former President and CEO of Checkers Drive-In Restaurants, Inc. and Big Boy Restaurants International, LLC.

Photo: Sorbetto/Getty Images

Content created by the Center for American Greatness, Inc. is available without charge to any eligible news publisher that can provide a significant audience. For licensing opportunities for our original content, please contact licensing@centerforamericangreatness.com.

Want news updates?

Sign up for our newsletter to stay up to date.