Stakeholder capitalism, or the idea that companies have a greater purpose besides just providing returns for shareholders, has hit a "tipping point," Salesforce chairman and co-CEO Marc Benioff said Tuesday.
"Capitalism as we have known it is dead, and this obsession that we have with maximizing profits for shareholders alone has led to incredible inequality and a planetary emergency," he said Tuesday at the World Economic Forum in Davos, Switzerland.
"When we serve all stakeholders, business is the greatest platform for change. And, the great news is, and I believe you can see it here, that stakeholder capitalism is finally hitting a tipping point."
His comments come as consumers have increasingly called on businesses to play a larger part in tackling societal issues such as climate change and global poverty. These were among the topics addressed at the annual meeting in Davos, which is now in its fiftieth year.
Benioff, Bank of America CEO Brian Moynihan and IBM CEO Ginni Rometty were on a panel chaired by World Economic Forum founder Klaus Schwab. One point they emphasized was that it makes moral as well as financial sense for company policies to focus on more than just shareholders.
"Our research team has declared that in the next decade, one of the ten trends is moral capitalism and that's where the investor money is going to flow," Moynihan said. "If you're thinking you can produce a profit, if you're a shareholder, and not address your owners, and not address your employees, you're going to have a problem. ... The skeptics say you can't do both — you can. Now let's go out and do it."
He said the next step is developing metrics that define "stakeholder capitalism." The World Economic Forum International Business Council, which Moynihan chairs, plans to release a rubric later this year.
"This gives life to how to measure companies' progress towards serving all stakeholders, doing a great job for its customers, clients, teammates, and shareholders, and doing a great job for society, and it's that 'and' that is critical," he said.