Corporations, someday, will care less about maximizing profits and more about employees and society, former President Bill Clinton told listeners on Tuesday.
Speaking at the annual Clinton Global Initiative meeting, Clinton predicted that American corporations will see a repudiation of the bottom line-focused business philosophy that now dominates. This change will happen, he said, without significant government involvement.
“I think the government can have incentives that will encourage it, but I think by and large it will happen, if it does, because of proof that markets work better that way,” Clinton said, adding that companies will see overall greater success by taking care of their employees and doing good for more than only their shareholders.
This corporate change, Clinton said, will be one of the most important keys to building a better future.
“We’re going to share inequality, misery and conflict, or we’re going to share prosperity, responsibilities and a sense of community,” Clinton said.
Those predictions were echoed by a panel of business leaders who followed the former president.
Tony James, Blackstone Group’s president and COO, highlighted Costco as a company that already embodies Clinton’s vision, saying the retailer “never tried to squeeze profits out of its employees,” but has still seen tremendous success along the way.
In addition to increasing long-term employee satisfaction, putting workers ahead of shareholders will also help attract the best and brightest to a company, U.S. Commerce Secretary Penny Pritzker said. She echoed Clinton’s prediction.
“People want to work for a company that they believe is socially responsible, and business owners are well aware of that,” Pritzker said. “It’s necessary to attract the kind of talent that you want to attract in the long haul. I believe we’re going to see a moving back to a more positive and more virtuous cycle.”
Outside the American sphere, Clinton’s prediction may already be coming to fruition.
Alibaba founder Jack Ma said earlier Tuesday that he has always sought to put customers first, then his employees, and lastly his shareholders.
Whether positive employee relations and social responsibility actual help sales, though, remains a question, according to the panel.
Blackstone’s James said he sees most consumers caring largely about the value and quality of their goods when all is said and done, but that a company’s reputation may come into play if it’s a product tied to trust like medicine.
Antony Jenkins, chief executive of Barclays, said he has found there is a “sweet spot” where a company can “create real commercial value” while still doing good.