In 2019, more than two years into Donald Trump’s polarizing presidency and just ahead of the pandemic, the Business Roundtable declared a commitment among its CEOs to focus on stakeholder capitalism. For generations, business leaders had put their shareholders’ interests first, but under stakeholder capitalism, those interests are only one priority among many: Employees, customers, and communities are given equal consideration.
What came next was a kind of Era of Good Feeling: We saw a huge uptick in pledges from global companies to leap forward in diversity and equity, treat their employees better, and make a positive impact on the planet.
A few years later, many of those commitments have been whiffed on, walked back, or deprioritized. Efficiency and cost savings are in, diversity and inclusion jobs are out, and net-zero timelines are being pushed back, as some companies are realizing how expensive—and distracting—it can feel to try to serve more than one constituency.
But stakeholder capitalism was never about making business less profitable, or putting morality over money. There are real proof points that for those with the patience and the willpower, it can be the most successful and lucrative strategy in the long term.
Take a look at the auto industry, where the push into electric vehicles, a vital step in the fight against climate change, is paying off for those who remain committed. True, EVs currently make up only 7.2% of the U.S. market, but they’re trending in the right direction. Tesla had one of the fastest journeys ever to the top 50 of the Fortune 500 (the largest U.S. companies by revenue). And General Motors, which has been in the top 50 for decades, shares the No. 1 spot on our annual Change the World list this year for its purpose-driven commitment to make only EVs by 2035.
This isn’t always an easy path to walk. GM’s commitments are being sorely tested, as consumer EV adoption has moved slower than hoped and the company tussles with the United Auto Workers over jobs and compensation in an electrified world.
Still, the EV example also goes to show that what CEOs say ultimately matters far less than how they execute. You could hardly find two more different personalities than the volatile Elon Musk and GM’s matter-of-fact Mary Barra. But each has found financial success by sticking to their mission. (Tesla’s EV credentials don’t necessarily mean Musk himself is entirely “green”; for more, see Peter Vanham’s feature from this issue.)
Also in this issue, you’ll find our annual list of the Most Powerful Women in Business. It includes big-company lifers like Barra, but also women making a major impact early in their careers. It turns out that the chief technology officer of the most important startup in decades, OpenAI, is a 34-year-old Albanian-born engineer, Mira Murati, who is portrayed on our U.S. and European covers. (Read our interview with her from this issue here.)
And as 77-year-old Trump and 80-year-old Joe Biden hurtle toward another standoff in 2024, we had to ask the question: How old is too old to lead? Our conclusion: Get ready for the 100-year-old CEO, as an older generation of workers struggles to hand over the reins.
Alyson Shontell
Editor-in-Chief, Fortune
@ajs
This article appears in the October/November 2023 issue of Fortune with the headline, “Patience pays off.”
See who made the 2023 Most Powerful Women in Business list.
