The billionaire founder of Silicon Valley company Salesforce (CRM) declared on Tuesday modern capitalism is “dead”, saying business leaders now have a “responsibility” to think beyond just shareholders.
“Capitalism as we have known it is dead,” Marc Benioff, chief executive of Salesforce, said at Davos. “This obsession that we have with maximising profits for shareholders alone has led to incredible inequality and a planetary emergency.”
Benioff, who is worth $7.7bn (£6bn) according to Forbes, made the comments during a panel on ‘Stakeholder Capitalism’ — the idea that companies should work to maximise the value for all ‘stakeholders’ such as employees and society, rather than just maximising shareholder value.
“Stakeholder capitalism is finally hitting a tipping point,” Benioff said.
“Does it mean I have to fight for my employees? Yes. If they’re being discriminated against and if they’re LGBT employees, yes, we will fight for them.
“Does it mean I have to fight for our customers? Of course. Or even our local stakeholders in our community like our homeless? Yes. Every CEO has a responsibility to think about all stakeholders.
“And yes ... The planet is a key stakeholder. We’re in a planetary emergency.”
Benioff also called for higher taxes on the rich to help tackle inequality and the climate crisis.
“The wealthiest among us, people like me, we need to pay higher taxes,” he said.
Benioff’s comments echo those of fellow Silicon Valley chief executive Dan Schulman of PayPal (PYPL), who earlier in the day said business leaders had an “ethical and moral” duty to look after staff.
The idea of stakeholder capitalism has been gaining ground in recent years and last August the US Business Roundtable, which represents some of the country’s top CEOs, said it was abandoning the idea of shareholder primacy and instead defining the purpose of a corporation as “improving our society”.
Bank of America chief executive Brian Moynihan appeared alongside Benioff on the panel and discussed how international business leaders are working on a data measurements for corporate environmental, social, and governance (ESG) performance. Moynihan said data was key to enabling stakeholder capitalism to evolve. Moynihan and his team are developing 22 datapoints.
“We are very good at measuring shareholder value,” Jim Snabe, chairman of industrial giant Siemens, said on the same panel.
“We’ve done that for many years. As CEOs and chairmen, we think that is an important role. If we want to go to stakeholder capitalism, we do need to measure the value that we can create for all stakeholders.”
Snabe said Siemens was “putting our remuneration system for the CEO and the executive team on an ESG base”.
Around 3,000 political and business leaders are in Davos, Switzerland this week for the World Economic Forum’s annual meeting. Attendees include US president Donald Trump, ECB head Christine Lagarde, and 17-year-old Swedish climate campaigner Greta Thunberg.