The old adage from Nobel Prize-winning economist Milton Friedman that “the business of business is business” is dead, says Salesforce CEO Marc Benioff. Companies now need to think about a lot more than just their bottom lines.
America needs “a new, more sustainable, more equitable, more fair capitalism,” Benioff told CNN’s Poppy Harlow in a Boss Files interview this week.
Under that new model, he says companies should think about maximizing not just shareholder returns but also what he calls “stakeholder” returns. Stakeholders aren’t just those who invest in the company, Benioff says, but those in the surrounding community and beyond. That’s also the message behind his new book, “Trailblazer,” released this week.
It is, perhaps, a surprising thing to hear from a billionaire whose company brought in more than $1.1 billion in net income last year and has seen its stock grow more than 3,000% since it went public in 2004. But Salesforce, Benioff claims, is already following that model.
The company has given away $300 million in grants, provided its customer relationship management software to 40,000 nonprofits for free and its employees have done some 4 million hours of volunteer work, Benioff said.
As the biggest tech employer in San Francisco, Salesforce has quite a few stakeholders.
“As a CEO, as a company, you cannot wash your hands of how society uses your products. You cannot wash your hands of your responsibility to society. You cannot wash your hands of your responsibility to the public schools or to the homeless or to whoever,” Benioff said. “I believe that business is the greatest platform for change.”
In August, Business Roundtable, the advocacy group of leading American CEOs, made a similar statement, arguing that corporations are responsible for improving society by serving more than just shareholders.
But running a company that considers more than just financial returns can sometimes involve complex and difficult decisions.
Last year, amid the Trump administration’s crackdown on immigrants crossing the United States’ southern border, Salesforce faced pressure from hundreds of employees to re-evaluate the company’s contracts with US Customs and Border Protection.
The company decided to create a new department called the Office of Ethical and Humane Use to help make such tricky business decisions. That department, which Benioff said he intentionally is not involved in, considers all of the possible use cases for Salesforce’s technology by any given customer, and speaks with stakeholders, such as employee groups and outside experts. Ultimately, it decided the company should maintain its contract with the CBP.
“This is a time where tech CEOs are really confronted with some extremely difficult situations,” Benioff said. “All of us wanted to get educated. We needed to understand, exactly how is our product being used? And then we needed to have the filter of, is it ethical? And by the way, all of those employees basically ended up agreeing that this was the right motion.”
That same group, he said, was also behind the recent decision to bar companies that sell certain types of automatic and semi-automatic firearms from using Salesforce’s products.
Benioff has been known for sparring with fellow leaders in the tech industry, who he says aren’t considering stakeholders’ needs.
He has repeatedly compared Facebook to cigarettes, calling its technology addictive and dangerous. But on Wednesday, he went a step further and joined the chorus of people calling for Facebook, as a company, to be broken up. Facebook declined to comment.
Benioff also said wealthy people and companies should be contributing more to society by paying more taxes.
Last year, Benioff pushed for Proposition C, which would tax San Francisco’s largest companies in order to raise money to combat homelessness. At the time, Benioff publicly clashed with Twitter CEO Jack Dorsey, who opposed the tax.
“I think that the homeless are one of my key stakeholders,” he said. “When I look at the homeless and when I see what’s happening in San Francisco, then I have no choice but to support Proposition C.”
Benioff said lawmakers and America’s wealthy should “have the conversation” about raising taxes on the wealthiest people in the country. He didn’t scoff at the notion of implementing rates of as high as 50% to 70%, like those that have existed in some European countries.
Now Benioff is urging the government to create regulations that would codify the “stakeholder return” model. He said the SEC should ask public companies, which are currently required to publish financial results and shareholder returns, to also publicly release details on how they’ve served their stakeholders — employees, customers, community members.
“That’s really my core message, is that you can do both,” he said. “It’s a false choice when we say, ‘Is it about shareholders or stakeholders?’ It’s neither. It’s about both.”