Amid a global pandemic, months-long protests over racial inequality and a bitterly contested election, the CEO of the world’s second largest public company says now is the time for America to reimagine capitalism.
“It’s fair, in today in 2020, in the midst of this pandemic, to essentially have a referendum on capitalism,” Satya Nadella, Microsoft’s CEO, said Wednesday during the Forbes JUST 100 virtual summit. “We all have to recognize what is that social core purpose of a corporation.”
In short, Nadella said, companies like Microsoft should be measured by the number of jobs and revenue created outside of the company and the economic impact they have on the markets where they operate, as opposed to surpluses generated within a company.
Nadella’s comments, which he says were inspired by a book published last year by Oxford management studies professor Colin Mayer, follow ongoing calls for business leaders to commit to steering their corporations toward so-called ‘stakeholder capitalism.’
Earlier this year, the World Economic Forum at Davos used the phrase as the theme for its annual event, a move that came after nearly 200 CEOs of large corporations — including Amazon's Jeff Bezos and JPMorgan Chase's Jamie Dimon — signed new guidelines by the Business Roundtable that specified the role of a corporation was to "promote an economy that serves all Americans."
Though a recent report cast doubt on just how committed these companies are to ‘stakeholder capitalism,’ Nadella pointed to Microsoft’s pledge to become carbon neutral by 2030, and highlighted a push by LinkedIn to address racial inequality as initiatives supported by shareholders.
Since Nadella took over as Microsoft CEO in 2013, the company has experienced explosive growth, in large part thanks to a booming cloud services business — a sector that has only recorded surging demand during the pandemic as the global workforce was forced to work from home.
Beyond the pandemic and racial justice issues, Nadella also discussed the upcoming federal election, which has been overshadowed by President Donald Trump’s assertions he may not accept its outcome. Nadella emphasized Microsoft’s reliance on a strong democracy and the need to maintain its institutions.
“As an American company — and tech company — our standing in the world, and in the United States, comes because of the vibrancy of the American democracy,” Nadella told Andrea Jung, the CEO of Grameen America, who hosted the talk. “So therefore any standing of any business, including ours, depends on us building on that strong institution of democracy here and everywhere else.”