For the last two decades, shareholder primacy-the idea that corporations should, first and foremost, make decisions that benefit shareholders-has been the dominant theory of corporate governance. But in August 2019, that changed. Nearly 200 CEOs of major American companies released a statement embracing a stakeholder theory of corporate governance. In the statement, these CEOs committed not just to shareholders, but also to employees, customers, suppliers, and the community.

The Business Roundtable statement sparked a flurry of commentary. The New York Times called the announcement" an explicit rebuke of the notion that the role of the corporation is to maximize profits at all costs." Commentary in Forbes highlighted the practical issues that the statement implicated. On one hand, the statement" serve [d] as a strong endorsement of the principles of corporate social responsibility and the important role that corporations can play in improving society." On the other, it" mark [ed] a further departure from traditional precepts of shareholder primacy," which would cause" boardroom confusion as to whom-or what-directors owe their attention and responsibility."