Well, the rules of business feel like they got a jolt back in the summer often when the Business Roundtable came out and they announced a new statement on the purpose of a corporation, and it was really about companies operating for the benefit of all stakeholders, customers, employees, suppliers, communities and shape and shareholders. So we've heard a lot about this over the last couple of years. We've had big name investors like Larry Finka Blackrock weighing in as well.
So addressing the changing rules of business, it's all in a new book. It's by Judy Samuelson. She is Vice president, founder and executive director at the Aspen Institute Business and Society Program. Her book Six New Rules of Business, Creating Real Value in a Changing World, and she joins us on the phone in New York City. Judy, nice to have you here on Bloomberg. Tell me about the premise of your book and what you initially set out to do. Sure,
thanks for having me. Sure you know it's really it starts with the premise of business is simply maybe the most important, simply the most fluential institution of our day. And we needed at the Table to address any problems of consequence and particularly these complicated long term changes that need to take place. So start with that, that premise, and then just that you know, the context and expectations
of business are changing fairly rapidly. We've seen this happen during COVID time, but certainly before as well, and the businesses to understand this changing context and maybe work with the forces that are that are shaping the context. Well. And what's interesting too, you you use real life examples to spell this all out. And you had case studies and which I always love, and I think about our audience,
you know, love specifics and love anecdotes. So give me one case study and what is the lesson that we learned out of it? You know, the one that comes to mind because you started out talking about the business round table having you know, changed up the definition of
the corporation. If I go back to the time that wrote Jelos was was the CEO of Murk and was engaged in the decision to whether or not to produce a drug that had no commercial value, but it was a it was a cure for a devastating disease called river blindness that's found in river valleys in Africa and beyond, and he had to make the decision about whether to go forward, and he understood he was it was he
was a scientist. He understood that the real purpose of Murk required their ability to unleash this scientific talent too. They wanted to produce, they wanted to be abuse to society. It was in their DNA and that if they refused to put forward a drug, that was essentially telling new scientists, sorry, you didn't get it right. Next time, find something that would be more popular in the United States of America.
It wouldn't it wouldn't have It wouldn't have spoken to the reason people choose to work for a great company like Mirk. So it's it's just kind of a tangible example to me of of real purpose, of clarity of what that purposes, and understanding what has to be true
to honor that purpose. Well, is it difficult though, to do that clearly, especially if you're a publicly held company, and at the end of the day, you're going to have members of the business media like myself, saying, oh, well, that stocks down nine because they didn't make their numbers, which is something I'm often critical of myself. But you know, what I'm saying, Yes I do, and it's you know, it's the reality of the world we live in. So you know, business people don't get up better work too.
You know, people don't join companies in order to make the shareholders happy. It's not it's not the lifeblood of why most people go to work in the morning. And I think increasingly business executives and leaders understand this. What the Business round Table was essentially saying, which has always been true, is that there is no single objective function. Yes, you have to care about your shareholders or they'll get
really annoisy. But to manage the business well and to build a business that you're proud to work in, requires being a tuned to a host of different inputs and and kind of consequences of business decisions. And these things are increasingly noisy because of the power of the Internet, because of the voice of employees becoming more important piece of the puzzle, and you simply have to manage to multiple objectives. That doesn't mean it's all the same for
every single company. Every company is different, and what has to be true for them to succeed over the long haul may be different than even for a competitor so I want to go through the rules, Judy, but I want to ask you the pandemic. How did that impact any of your writing for this book? Wow certainly slammed right in the middle of the book. Um, you know, I think one one kind of download from the pandemic is just that it's humanized the corporation to some degree.
You know, this all of the conversation about the health of frontline workers and the risk they were taking, whether or not they were being adequately rewarded, and companies playing with CEOs pay in this moment, etcetera. It kind of put a human face on companies that we don't necessarily go deep into all the time, and that relates to some of the underlying tensions and changes and forces that are shaping business today. And they stay there. Do you
think they're lasting? You know, the whole game is about whether companies are taking seriously the process of lining aligning their operations and their decision making with their intentions. We have had no shortage of CEO speaking out in the last years, not just during the pandemic, but going back into early years of the Trump administration and even before that, speaking to complicated issues around immigration, around the right to own a you know, to bring them into a store
or not. These social issues that don't always rebound to the business environment but will receive you as increasingly have been kind of having to mirror what they're hearing from their own employees. And I think that I don't think that's going to change. But it's still a complicated endeavor to set intentions or speak to the complexity of these questions and then make sure that you're actually scrubbing your operations and kind of rules of decision making to make
sure that they're aligned with those intentions. Complicated, It is complicated, I agree. And you know, I was having a conversation with someone about, you know, how racism has really come to the forefront, and this individual said, you know, in some ways we have President Trump. To think that that really brought this conversation out. That to have you know, a president that had very extreme views about things and others who had very extreme views about racism, that it really,
you know, created a very strong conversation. Uh, to some extent that's kind of controversial, but you do, you know, you do wonder um And what this individual saying to me is that as things start to get quieter and more normal in terms of the political environment. Do does our enthusiasm for change also kind of die down? I think that it has pointed out domains where the companies
have real agency. You know, executives have real decision making power that deeply influence the kind of conduct and the well being of employees. Certainly they have real decisions that make that that either um kind of stick with the status quo and and fail to kind of review our assumptions or mind these these moments and and try to figure out where in the company, where are the ways in which we can actually influence racism authentically from inside
the enterprise. And I think that conversation is ongoing. And then back to employees again, I don't think employees are going to let business off the hook. I think they are a natural bridge between the inside world of the enterprise and the community that's the host and hosts the enterprise.
And they are both the risks. They are both. They are both keen to understand and to communicate the risks that they see for the business, but also the opportunities that are possible if a business does align with their
real values. Yeah, I do think you know, you're onto something, and I feel like we've had a lot of conversations about that that the future worker, the younger worker, probably younger today, and then you know who will be you know, that employee for for years to come is certainly being an agent for change at companies because they're demanding it or they're going to go work somewhere else. And the same thing for consumers. I see it my own daughter.
Hey listen, um, I'm just going to mention some of these these six rules that you lay out, you talk about co create, don't compete to culture as king. Employers are more than stakeholders, they are the business. Corporate responsibility is more than your carbon footprint. Climate change, that's a big one, and I think it's really relevant and important today on a day when we're seeing many states around the country that are either without power or dealing with
rolling blackouts because of climate change. Yes, and it's also one where we've seen some businesses step up and raise the bar, and we've seen other companies kind of joined them in the fray. So I think that's that's the dynamic one. Obviously, with a new administration that has a very different mindset about the need to address this problem. Um, business can be aligned with that direction as well, and not be working at odds, but be working along with government.
What do you think is the most different among the six rules that you've laid out, Which is the most difficult right now? Most difficult? Um? Well, I do think that the I think the degree to which capital markets is still in the thrall of shermold the primacy is kind of a simple way to measure and one that from which they benefit tremendously if they're right. Um, I think that's still a conundrum. I think we hear the intentions of business that you know, their CEO pay is
is anchored. For the large public companies there, uh, stock price is the center of their pay package, and so they're internally conflicted about these trade offs where I'm sorry, it's of profits have been sent to shareholders of the last decade. That's going to have to change if we're going to enable a kind of a shared economy here where everyone benefits, and that's ultimately has to be the long game. Business is going to succeed. You can't have
a successful business in a failed society. Which is a really great point to leave on. And I agree that in terms of dealing with some of the gaps that are out there in society. That's that's the way we need to do it. Judy, thank you so much, really thoughtful. Judy Samuelson, Vice President at the Aspen Institute. Check out our book, Six New Rules of Business, Creating real value in a changing world.