Can Jamie Dimon Nudge a Continental Shift in Perception?

Recently, Jamie Dimon and the CEOs of almost 200 of the world’s largest companies issued a Statement of Purpose of a Corporation pronouncing that shareholder value can no longer be the primary measure of corporate success.  All stakeholders must be considered. This Statement, issued by the Business Roundtable, is an 8.5 magnitude earthquake in the world of business and perhaps more impact for our society at large. We believe this is part of a series of seismic activity that is shifting perception from profit growth towards a more sustainable and mature approach.

At its essence, this statement says that companies must move away from exclusive focus on more profits and cash generation.  They must consider the overall impact the company has on all of its stakeholders – customers, suppliers, employees, communities, etc. 

While the Statement of Purpose is a broad vision document without specifics, it is a complete validation of the concepts proposed here that we must move from “more” to “better”. 

We interpret this statement as follows:

A Company’s valuation today is based on the present value of its future cash flow, but its ability to generate that cash flow is increasingly dependent on a wider range of influential factors, including brand value and reputational risk. Unless companies can get better over time, they cannot sustain value for the long-term.

It is likely that this pronouncement will set off a number of aftershocks and other seismic events that will continue the shift business and society’s perception of how we generate and perceive value.