By Lawrence H. Summers and Natasha Sarin, Washington Post, 1/30/20
Over the past year, the concept that corporations owe a responsibility to the broader society beyond their responsibility to their shareholders has flourished. The Business Roundtable renounced its earlier view that companies exist to serve stockholders and endorsed stakeholder capitalism last summer. BlackRock chief executive Larry Fink, whose firm controls $7 trillion in investable funds, expects a “fundamental reshaping of finance” and has vowed to vote against corporate directors insufficiently committed to serving interests beyond those of stockholders.
This year’s Davos meeting was centered on business’s responsibility to protect the environment. And there has been much celebration of recent corporate commitments, such as Microsoft’s promise to invest $1 billion to end or offset all of its greenhouse-gas emissions, present and past.
The most important stakeholder of U.S. corporations is the United States itself. Before any obligation to voluntarily reduce emissions, start charter schools or pay above-market wages should come an obligation to pay a reasonable share of income in taxes….
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