Stakeholder Capitalism Gets a Report Card. It’s Not Good.

Marc Benioff, chief executive of the technology giant Salesforce, presents himself as an evangelist for stakeholder capitalism: the idea that companies must elevate the interests of workers, the environment and local communities alongside shareholders.

He has written books and opinion pieces arguing that profits are not sufficient; companies must do good. He attends the World Economic Forum in Davos, Switzerland, a hotbed for such thinking. And his company was among the 181 members of the Business Roundtable, a club of C.E.O.s, that last year promised to broaden its traditional obsession with the bottom line to include societal concerns.

In late August, as Salesforce celebrated more than $5 billion in quarterly sales, Mr. Benioff proclaimed validation. “This is a victory for stakeholder capitalism,” he said in a television interview. The next day, in the midst of the pandemic, Salesforce informed 1,000 employees that their jobs were no longer needed.

The coronavirus, its attendant economic devastation and the ongoing movement against racial injustice have collectively posed the first test of the lofty words proclaiming a kinder form of capitalism. The results have fallen short of the promise, according to a study released Tuesday and obtained in advance by The New York Times.

The Business Roundtable’s statement of a purpose of a corporation, released last year, was touted by prominent executives as a landmark in the evolution of corporate governance. But its signatories have done no better than other companies in protecting jobs, labor rights and workplace safety during the pandemic, while failing to distinguish themselves in pursuit of racial and gender equality, according to the study.

Financed by the Ford Foundation, the study is the work of KKS Advisors, a consultancy that counsels companies on environmental policy, and The Test of Corporate Purpose, a group of researchers convened to assess how corporations have responded to the pandemic and the movement against racial injustice. Its advisory board includes a professor of management at the University of Oxford, and senior executives from financial firms including Morgan Stanley and Liberty Mutual.

“Since the pandemic’s inception,” the study concludes, the Business Roundtable statement “has failed to deliver fundamental shifts in corporate purpose in a moment of grave crisis when enlightened purpose should be paramount.”

The study enhances doubts that corporations can be depended upon to moderate their quest for profits to pursue solutions to challenges like climate change, racial injustice and economic inequality. Skeptics argue that a single stakeholder will always retain primacy: the shareholder.

The Business Roundtable presents its mission statement as a reflection of the belief that C.E.O.s face extraordinary pressures to protect workers, the environment and community interests or suffer punishment in the marketplace.

“It was not a demotion of the long-term shareholders, because, in our view, the interests of all the stakeholders align in the long-run success of the enterprise,” said the president of the Business Roundtable, Joshua Bolten. “But it is a rejection of short-term shareholder interests.”

Companies can trigger immediate gains in their stock prices by cutting costs through layoffs or slashing benefits. “But in the long term that’s not going to serve the enterprise well if you haven’t properly taken care of all of your other stakeholders,” Mr. Bolten added. “You cannot take care of any one of them without taking care of them all.”

Yet the recent history of American capitalism is the story of wages stagnating for ordinary workers even as shareholders reap extraordinary gains. The divide has proved especially stark during the pandemic: Shareholders suffered initial plunges in asset values but then recovered; tens of millions of wage-earners remain jobless, massing at food banks.

Mr. Bolten said that picture masks how Business Roundtable members have aided employees during the pandemic, providing help with child care and flexibility to work from home, while boosting philanthropic efforts.

“I think they have done exceptionally well,” he said.

The new study says otherwise. Researchers explored the workings of 800 companies — those whose shares are included in the S&P 500 and the FTSEurofirst 300, an index of European stocks — and narrowed the survey to 619 for which they were able to amass at least three years of data.

They mined trade publications, news reports and other industry sources to determine the degree to which companies were operating in accordance with the Sustainability Accounting Standards Board, a nonprofit that promotes corporate standards on social and environmental issues. They examined how the companies performed between June and July on a range of indicators relevant to the pandemic, such as workplace safety, and to racial inclusivity, including the diversity of governing boards.

The report notes that very few companies that signed the Business Roundtable statement submitted it to their governing boards for approval, a fact cited in a law review article as evidence that the pledge is an exercise in public relations.

Mr. Bolten said board passage was not required, because member companies have already embraced the statement’s principles. “It did not arise from nowhere,” he said. “The statement has to be viewed as both capturing an evolution and expressing an aspiration.”

The new report singles out Wells Fargo for rejecting a shareholder proposal that sought to implement the Business Roundtable pledge by exploring the possibility of converting the bank’s legal structure into a benefit corporation, which would allow it to subordinate shareholder interests to other concerns.

A Wells Fargo spokeswoman said the bank has responded to the economic shock by turning branches into food banks and deferring loan payments.

The report trains special attention on Amazon. Though its founder and C.E.O., Jeff Bezos, signed the Business Roundtable statement, Amazon has emerged as a conspicuous example of a company that has profited from the pandemic — selling more than $164 billion worth of goods this year — while drawing accusations that it has failed to protect workers.

In March, Christian Smalls, an employee at an Amazon warehouse in New York, was fired after leading a walkout, protesting what he said was the company’s failure to provide protective equipment even as several workers became ill.

Amazon said he was fired for violating a quarantine policy. Mr. Smalls said he was placed on quarantine only after demanding that the company provide paid sick leave to others.

In a written statement, Amazon dismissed the study as “flawed research” that relied on “the meaningless measure of ‘sentiment about company actions’ and fails to evaluate the actual response — which in the case of Amazon was proactive, swift and effective.”

The company said it has invested more than $800 million on safety improvements, outfitting workers with masks, hand sanitizers and other protective gear, while preventing the spread of the virus at its facilities.

The study does not assess the extent to which signatories of the Business Roundtable statement have continued to pay dividends to shareholders while laying off workers. But some did just that.

Arne M. Sorenson, president and C.E.O. of Marriott International, the world’s largest hotel chain, is co-chairman of a Business Roundtable task force assembled to address Covid-19. In March, he announced that he was furloughing tens of thousands of employees, asserting that his hand had been forced by the swift deterioration of the business. Less than two weeks later, Marriott paid out $160 million in dividends to shareholders.

Marriott lands in the bottom half of companies in its response to the pandemic and demands for racial inclusivity, according to the study.

A Marriott spokeswoman, Connie Kim, noted that Marriott suspended further dividend payments.

The report highlights examples of Business Roundtable signatories that have performed better than most, including Baxter International Inc., an Illinois-based manufacturer of medical devices; SAP, a German software firm; and Willis Towers Watson PLC, a British insurance company. All three have made progress on racial inclusivity, the study finds.

The report praises BlackRock, the world’s largest asset management company, for taking early action to alleviate the threat of Covid-19. The company donated $50 million for emergency services, including the delivery of vital medical equipment to hospitals. It notes the leading role played by BlackRock chief executive Laurence Fink in steering investments toward companies that limit climate change.

No one has embraced the tenets of stakeholder capitalism more fervently than Mr. Benioff.

From its founding in 1999, Salesforce — which makes software used by companies to track interactions with their customers — has donated 1 percent of its equity, 1 percent of its products and 1 percent of its employees’ time to a range of philanthropic undertakings.

Salesforce workers volunteer at homeless shelters and nonprofits that aid refugees. A company foundation has directed hundreds of millions of dollars to local schools and hospitals.

During the worst of the pandemic in the United States, Mr. Benioff tapped contacts in China to procure more than 50 million pieces of protective gear.

“There are very few examples of companies doing this at scale,” Mr. Benioff said in a telephone interview.

With more than 54,000 employees worldwide, Salesforce has provided Mr. Benioff a huge platform to advance the tenets of stakeholder capitalism. Overall, the company has performed far better than most in responding to the pandemic and the drive for racial justice, the study finds.

Its principles are not undermined, Mr. Benioff says, by his company’s decision to phase out 1,000 workers the day after celebrating a tremendous earnings report, and shortly after the expiration of a widely touted 90-day pledge to avoid layoffs.

Salesforce is continuing to hire in other parts of its business, he said. Some of the affected employees will be rehired in other areas, while those who depart will leave with severance.

“We have to be able to grow and make change, or we cannot achieve our goals, which is to become a larger, much more successful company for our customers, our shareholders and also, yes, our stakeholders,” Mr. Benioff said.

He described the objectives of the Business Roundtable statement as a long-term project.

“I’ve seen from my own viewpoint a systemic change in how C.E.O.s behave over the last 20 years,” he said. “I never said it’s a revolution, but I said it’s an improvement.”

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