A year ago, the Business Roundtable — a leading group of American CEOs — made a bold declaration on the purpose of a corporation: Rather than being dedicated primarily to enriching shareholders, the group broadened the responsibility of corporate America to all stakeholders — employees, customers, communities and owners alike.
At the time, I wasn’t a member of the Business Roundtable. To be honest, I was a bit skeptical when I first read about it. For decades, the leaders of Delta Air Lines had built a business around those very principles, adhering to the “virtuous circle” that always put people first. By taking care of employees, our theory goes, our people take great care of our customers, who reward us with their loyalty. That, in turn, benefits our owners, who invest more of their capital in the company. And the circle continues.
That strategy has resulted in things like the world’s most generous profit-sharing plan, which pays out to Delta employees every February, on Valentine’s Day. Over the past five years, Delta has paid more than $1 billion in profits every year directly to our people. I’ve spent countless hours with investors over the years discussing this program, explaining that it is in their long-term interests to give our people a substantial stake in the company’s success.
The same philosophy led to the announcement, shortly after I became CEO, that we would invest 1 percent of our profits into our communities, giving back to those who supported our business. It also drove our decision earlier this year to invest $1 billion over the next decade in sustainable air travel. And it inspired billions of dollars in capital investments to transform the air travel experience for our customers, some of which we presented in our keynote address at CES in January.
So I knew from experience that this type of alignment isn’t easy — it’s worked for Delta because it’s been grounded in our culture since the founding of the company 95 years ago. It’s one thing to declare; and much harder to execute.
But since then, I’ve been heartened on numerous occasions to see that this fundamental rethinking of the purpose of a corporation is more than just public relations. Members of the Business Roundtable have been taking these principles seriously — and the COVID-19 pandemic and our global crisis of racial injustice only accelerated the drive to look beyond the bottom line.
Just a few examples include:
· American Express creating a grant program to support the National Urban League and the NAACP Legal Defense and Education fund.
· CVS Health investing to improve public health in our nation’s most marginalized communities.
· GM investing in 40 nonprofits to aid communities impacted by the COVID-19 pandemic.
· Home Depot supporting the Lawyers Committee for Civil Rights Under Law to secure nationwide racial justice.
· UPS delivering 5 million meals to rural students and their families impacted by COVID-19.
The list goes on and on — you can find countless more of these examples here.
So now, on the one-year anniversary of this important and historic reconsideration of the purpose of a corporation, we’re proud to stand as new members of the Business Roundtable. We’re excited to be part of a broader movement in American business that shares the same principles as ours — that putting people before profits is, in fact, in the best interests of our planet, our communities, our employees, and, yes, our shareholders.
And while we’ve been temporarily sidelined by the pandemic, we know that our recovery and return to profitability will benefit each one of those stakeholders. Because at Delta, that’s always been at the heart of our culture — and it always will.