Business Roundtable

The Business Roundtable (BRT) is a group of chief executive officers of major U.S. corporations formed to promote pro-business public policy.^[1][2][3][4]

History

The Roundtable was founded in 1972 by John Harper, the head of Alcoa, and Fred J. Borch, CEO of General Electric, who were concerned about growing public hostility toward corporations as evidenced by support for government regulation of the workplace environment and about the power of unions to squeeze corporate profits in an increasingly competitive international market. The two CEOs talked with John Connally, President Nixon's Secretary of the Treasury, and Arthur Burns, the Chairman of the Federal Reserve, who advised them to set up a lobbying organization that would specifically represent large banks and corporations. Harper was the first president, followed by Thomas Murphy of General Motors, Irving Shapiro of DuPont, and Clifford Garvin of Exxon.

The group was formed through the merger of three existing organizations: the March Group, consisting of chief executive officers who met informally to consider public policy issues; the Construction Users Anti-Inflation Roundtable, a group devoted to containing construction costs; and, the Labor Law Study Committee, largely made up of labor relations executives of major companies.^[5] The group has called itself President Obama's "closest ally in the business community."^[6]

Activities

U.S. Secretary of Labor Alexander Acosta addressing the Business Roundtable in June 2017

The Business Roundtable played a key role in defeating an anti-trust bill in 1975 and a Ralph Nader plan for a consumer protection agency in 1977. It also helped dilute the Humphrey-Hawkins Full Employment Act. But the Roundtable's most significant victory was in blocking labor law reform that sought to strengthen labor law to make it more difficult for companies to intimidate workers who wanted to form unions. The AFL-CIO produced a bill in 1977 that passed the House. But the Roundtable voted to oppose the bill, and through its aggressive lobbying, it prevented the bill's Senate supporters from rounding up the 60 votes in the Senate necessary to withstand a filibuster.

In fiscal policy, the Roundtable was responsible for broadening the 1985 tax cuts signed into law by Ronald Reagan, lobbying successfully for sharp reductions in corporate taxes. In trade policy, it argued for opening foreign markets to American trade and investment. The Omnibus Trade Act of 1988 reflected the thinking of the Business Roundtable. In 1990, the Roundtable urged George Bush to initiate a free trade agreement with Mexico. In 1993, the Roundtable lobbied for NAFTA and against any strong side agreements on labor and the environment. It provided the money and leadership for the main pro-NAFTA lobby.

The Roundtable also successfully opposed changes in corporate governance that would have made boards of directors and CEOs more accountable to stockholders. In 1986, the Roundtable convinced the Securities and Exchange Commission to forgo new rules on merger and acquisitions, and in 1993 convinced President Clinton to water down his plan to impose penalties on excessive executive salaries. Citicorp CEO, John Reed, chairperson of the Roundtables Accounting Task Force, argued that Clinton's plan would have had negative effects on U.S. competitiveness. The Roundtable's Health, Welfare, and Retirement Income Task Force, chaired by Prudential Insurance CEO Robert C. Winters, cheered President Bush's plan, which consisted mainly of subsidies to the health care industry. The nation's health care system works well for the majority of Americans, the Roundtable announced in a June 1991 statement. "We believe the solutions lie not in tearing down the present system, but in building upon it."

In a press release, it said it "strongly supported passage of" the No Child Left Behind Act of 2002, and was "actively working with states on implementation." It has issued press releases, submitted editorials, given congressional testimony, and distributed position advertisements.^[7]

The Business Roundtable also acts as a major lobby that aims to extend or maintain administrators' rights/power in large companies. For example, the U.S. Securities and Exchange Commission adopted the so-called "shareholders’ access to proxy" rule, which aimed to empower shareholders in the proposition and nomination of administrators of big corporations. The Business Roundtable was strongly against that rule, as its president John Castellani reported to the Washington Post about removing this rule: "this is our highest priority [...] Literally all of our members have called about this".^[8] And they got the upper hand: the SEC rule was finally dropped after intense lobbying and lawsuits.

Criticism

The Business Roundtable has been identified by advocates for shareholder democracy and owners' rights as a primary inhibitor of progress in corporate governance, who claim that through its lobbying of the SEC, the NYSE, and other regulatory and self-regulatory institutions, the Business Roundtable has sought to limit shareholders proxy rights and the power to nominate directors. The critics of the Business Roundtable contend that rather than fighting on behalf of stockholders in companies, it has focused purely on increasing executive power and compensation, thereby diminishing return to the owners (shareholders) of these firms.

• Corporate governance pioneer Robert A.G. Monks, in his 2007 book Corpocracy: How CEOs and the Business Roundtable Hijacked the World's Greatest Wealth Machine -- And How to Get It Back, argues that the Business Roundtable has been a key player in the steady dilution of shareholder access to the boardroom and that this has contributed to the skyrocketing rates of CEO compensation.
• G. William Domhoff, in Who Rules America?, argues that the Business Roundtable supports the network of corporate control, and influence over the economy, politics, and media.
• In The Battle for the Soul of Capitalism, John C. Bogle, the founder of the Vanguard Group and author of investing classic Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor, argues that the Business Roundtable is to blame for the failure of recent corporate governance initiatives.
• The University of Hawaii's Robert R. Locke, author of Confronting Managerialism, identifies the Business Roundtable as a major contributor to what he calls "Managerialism", the shift in power from owner/shareholders to those who are the manager/agents of firms. His 2011 work, Confronting Managerialism: How the Business Elite and Their Schools Threw Our Lives Out of Balance, explores several cases in which the Business Roundtable has opposed changes to corporate governance rules that would have empowered shareholders at the expense of CEOs.

==Board of Directors==^[10]

Leadership

References

External links

• Official website