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What’s a company for? An answer from Ancient Greece

By Steve Cook

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Love this. And the beat [debate] goes on, la-di-dah-di-dah….

What’s a company for? An answer from Ancient Greece
By Sandy Pepper

An imagined dialogue between Milton Friedman, the economist who has come to represent the shareholder primacy world view, and Socrates. The now venerable management scholar Charles Handy asked “What’s a Business For?” in an article published in Harvard Business Review in 2002. Charles Handy has often been ahead of the times—he anticipated the business process outsourcing phenomenon long before it become a standard part of the corporate playbook—and the question he posed in 2002 is has now become one of the current topics in business and management journals.

In August 2019 Business Roundtable, an association of the chief executive officers of major US corporations, redefined the purpose of the corporation to “promote an economy that serves all Americans”.

Since 1978 Business Roundtable has periodically issued principles of corporate governance. For at least the last 20 years these have endorsed the principle of shareholder primacy—that corporations exist with the primary purposes of maximising value for shareholders. The new statement instead “affirms the essential role corporations can play in improving our society when CEOs are truly committed to meeting the needs of all stakeholders”.

In the UK, Professor Colin Mayer of Saïd Business School at Oxford University, has been leading a major research and engagement programme examining the purpose of business and its role in society at the British Academy, the national academy for the humanities and social sciences. The Future of the Corporation—Purpose Summit, conducted online from 22–24 June 2020 because of the coronavirus pandemic, has recently been examining a proposed new definition of the purpose of business—“to profitably solve the problems of people and planet, and not profit from creating problems”.

Read the full article by Sandy Pepper here

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