Last week’s statement by the US-based Business Roundtable – which represents some of the world’s largest companies – abandoning a long-held view that shareholders’ interests should come first elicited considerable excitement in the business community. Though perhaps it should not have, according to Dell CEO Michael Dell.
Earlier today he told Which-50 it was “revisionist history to say that companies never cared about anything other than the shareholder”.
He was referring to commentary about the statement, rather than the statement itself.
Last week the Business Roundtable released a new Statement on the Purpose of a Corporation which signed by 181 CEOs (including Dell).
Jamie Dimon, Chairman, and CEO of JPMorgan Chase & Co. and Chairman of Business Roundtable said, “The American dream is alive but fraying. Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernised principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans.”
While praising Dimon’s leadership of the Business Roundtable and acknowledging the change in the language Dell noted, “Companies have been talking about stakeholder management for some time. Plenty of companies have recognised for a long time that its [stakeholders include] customers, it’s the communities, it’s the employees, it’s the suppliers. You know, we have responsibilities beyond our shareholders, certainly.”
He said the new statement reflected what a lot of the leading companies are already doing and he referenced the company’s own 2020 goals, which he said had just been retired as they had all been achieved ahead of schedule.
We asked VMware CEO Pat Gelsinger, who reports to Michael Dell as the chairman of VMware, and who was recently awarded the Best CEO in America ranking by employment site Glassdoor for his perspective.
“If you’re going to be a CEO, the business has to be successful. And if the business isn’t successful, you can’t do anything else because you’re laying off people, you’re shrinking … But once you’ve made the business successful, then everything else is important.”
“You have to establish the right culture, operate with the highest of integrity, or not cut corners, right, and focus the long term value to customers.
“If your customers don’t love you, you won’t be in business long term. They have to love you, and ultimately [you’re] making the communities. And that’s core to who we are. We call our values, ‘epic values’; execution, passion, integrity, customers, community. It is deeply embedded into who we are.”
Dell and Gelsinger also both addressed the growing concern over the impact of the trade dispute between China and the US.
According to Gelsinger, “We don’t expect the dispute and the issues will be resolved quickly. It will take a long time.”
Perhaps more interesting was the revelation that VMware sees the world bifurcating into two trading blocks – a western bloc based on the USA and Europe and one eastern bloc based largely on China.
“We are heavily partnered with both China, the US, and other western trading countries.”
He said every company needs to determine how it lives with these dual trading blocs and to build up supply chains and engagements and approaches to customers and trading partners.
Gelsinger said VMware believes every company is in the process of figuring out how to live in a dual -supply-chain, dual-trading-bloc world, and his company is already underway and making those adjustments.
“What VMware is doing is saying we’re committed to China. And we’re adjusting how we work. At the same time, we’re super committed as a US company to grow the partnerships. Overall, we will, of course, comply with all the laws about countries, but we’re committed to both.”
Dell, meanwhile, confirmed that the business has had to make adjustments to deal with the reality of the tariffs each company has imposed in the other in their current trade dispute and that it will need to continue making adjustments.
“Our first priority is to ensure continuity of supply for our customers. And fortunately, we’ve been able to do that.”
He said, “We have a very substantial business in China and outside of China that certainly relies on our global supply chain, we have factories all over the world. And I think we have a lot of flexibility to enable our business to continue to thrive both outside of China and inside of China.”