In 2019, 181 CEOs signed the Business Roundtable statement redefining the purpose of a corporation. No longer just shareholder value, they announced. Now it was stakeholders — employees, communities, the environment, society at large. The statement was celebrated as a turning point. The era of purpose-driven capitalism had arrived.
By 2025, most of the signatories had quietly returned to shareholder primacy. Many had cut the very programmes the statement implied they would protect. Some had eliminated the roles created to deliver on the pledge. The statement remains on the Business Roundtable website. Nobody references it anymore.
It lasted about as long as a New Year’s resolution. And for roughly the same reason.
B Corp certification was supposed to be different. A rigorous, third-party verified commitment to balancing profit with purpose. Companies underwent detailed assessment. They changed their legal structures. They submitted to regular audits. The B Corp badge meant something.
Then came the stress test. Rising interest rates. Tightening margins. Shareholder pressure. The anti-ESG political movement. And one by one, the purpose-driven companies discovered that purpose is easy when the market is up and excruciatingly hard when the market is down.
ESG — Environmental, Social, and Governance — went through the same arc at institutional scale. Asset managers who had built ESG into their investment frameworks began quietly removing the language. Not because the data changed. Because the political climate changed. Red-state attorneys general threatened legal action against funds that considered environmental impact. The funds capitulated. Not because they stopped believing in the data. Because they never made decisions based on belief. They made decisions based on risk. And the risk calculation shifted.
Stakeholder capitalism was always a comfortable nonsense because it attempted to serve two masters and pretended there was no conflict between them. When shareholder returns and stakeholder wellbeing aligned — as they briefly did during a decade of cheap money, tight labour markets, and cultural pressure — purpose was free. When they diverged, as they inevitably do, purpose was the first thing cut.
There is a deeper problem. Purpose-driven business, as commonly practised, located the commitment in the brand rather than in the structure. The company said it was purpose-driven. The annual report said it was purpose-driven. The careers page said it was purpose-driven. But the incentive structure — the thing that actually determines behaviour under pressure — remained unchanged. Executives were still compensated on financial performance. Boards still evaluated CEOs on total shareholder return. The purpose was painted on top of a machine that was wired for extraction.
When the paint peeled, the machine was still there. Working exactly as designed.
The organisations that will matter are not the ones that declare their purpose. They are the ones that have wired purpose into their incentive structures so deeply that abandoning it would cost more than keeping it. Almost none have done this. The rest were decorating.