Abstract Type: Independent oral presentation
Abstract TitleThe Business Roundtable meets Gossip Theory: Understanding the Turn toward Stakeholders
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Abstract
This presentation uses Gossip Theory to analyze the evolution of Business Roundtable (BRT) statements since the 1970’s. The BRT is made up mostly of the CEO’s of the 200 or so biggest companies in the United States but also includes a few more from Europe and other parts of the world. Since the early 1970’s, the BRT has been putting a statement every few years about what the relationship of business should be to society at large. It has maintained an extremely consistent posture over almost this entire time, famously echoing Milton Friedman’s line: “The business of business is business.” In other words, the shareholder reigned supreme with the assumption that the profit motive would force businesses to behave responsibly because they would not wish to suffer the loss of reputation. Of course, such faith in businesses following best practices was misplaced. And, the world of the 1970’s is quite different from that of the 21st century. In its most recent statement of 2019, the BRT acknowledged for the first time that stakeholders were equally important to business success as shareholders. This presentation uses Robin Dunbar’s Gossip Theory to explain this shift. Dunbar posited that gossip works in humans the way grooming functions with primates, namely to build connections and reinforce norms. As human beings shifted to larger communities, gossip became a cost-effective way to communicate social standards while keeping bad behaviour in check. So, gossip serves as a way to police the behaviour of delinquents and free riders who would undermine the entire system if given free rein. It can be seen as an evolutionary development to protect the worst excesses of our species. Gossip Theory can thus explain how businesses have come to recognize the importance of stakeholders in general and environmental sustainability in particular.
Related Conference Topic Area
social license to operate
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Presenter Information
First Name Asif |
Last Name Siddiqui |
Affiliation Norquest College |
Author(s) Information
Author | First Name | Last Name | Affiliation |
1 | Asif | Siddiqui | Norquest College |