Pundits Care About CEOs' Virtue Signaling, But Stocks Won't

If you went anywhere near financial news on Monday, chances are you saw the Business Roundtable—a cabal of nearly 200 CEOs—announced its members no longer viewed maximizing shareholder value as their core purpose. Instead, they believe decisions should consider all “stakeholders”—including employees, suppliers and communities. While Milton Friedman rolled over in his grave, pundits expounded on this “major philosophical shift” and what it could mean to corporate governance and profits in the future. Our guess: not much. Statements like this are mostly marketing fluff—in this case, probably aimed at winning over politicians and socially conscious millennials. If anything, this virtue-signaling may help keep more onerous regulation at bay—a long-term positive.