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The Executive View: The 'Bottom Line' Is No Longer Just About Money

In today's corporate world, the primary or most important consideration has come to mean a lot of things other than profit.

A pencil with the word bottom line written on it.

​When we talk about business and the bottom line, what immediately comes to mind?

Most of us probably think about money or profit, or the final total of an account or balance sheet.

Merriam-Webster acknowledges that definition, but adds another:

The bottom line, it says, means "the primary or most important consideration."

In today's corporate world, the primary or most important consideration has come to mean a lot of things other than money or profit.

Two years ago this week, 136 U.S. public company executives—many of them titans in American business—signed a document titled "Statement on the Purpose of a Corporation," in which the executives wrote, "While each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders."

That commitment, written and agreed to by members of the Business Roundtable, included: delivering value to customers, compensating workers "fairly" and "providing important benefits," and training employees with new skills "for a rapidly changing world."

The executives committed to using "sustainable practices" to protect the environment and to "foster diversity and inclusion, dignity and respect."

"Each of our stakeholders is essential," they concluded. "We commit to deliver value to all of them, for the future success of our companies, our communities and our country."

Two years later, this statement "did not represent a meaningful commitment," say researchers at Harvard Law School's Program on Corporate Governance.

How did they come to this conclusion? The researchers argue that if the executives were sincere about their commitment, then "several important corporate documents at these companies would need to be revised," according to a report on the Harvard research by Fortune. After scouring corporate governance guidelines, corporate bylaws, proxy statements, director pay policies, and responses to shareholder proposals, the researchers determined that the "Statement on the Purpose of a Corporation" made two years ago was "mostly for show."

The Business Roundtable found the research "deeply flawed," according to Fortune.

Home Country as Corporate Stakeholder

Public relations giant Weber Shandwick found in a recent survey that 58 percent of multinational business executives say their home countries are "very" important stakeholders, which is the same proportion that say precisely the same thing about their shareholders.

Now comes the conundrum: More than 8 in 10 of these executives said that their home country's national security or economic interests should sometimes be more important than their business's interests. Then again, the same proportion also said that for a company to succeed (and we presume this refers to the financial bottom line) that the company must act in its own best interests.

"Executives are saying corporate responsibility includes national responsibility, and leaders must plan accordingly," said Michelle Giuda, executive vice president of geopolitical strategy & risk at Weber Shandwick. But Giuda also acknowledged that "whether to prioritize company versus home country interests is the central tension revealed by the research."

And that, she said, represents "an entirely new risk calculus for business leaders navigating 21st century geopolitical competition."

"The rising importance of home country and competing national priorities and values is compelling leaders to prepare to raise their voices on international issues and challenging them to choose when to put the company or country first," stated Weber Shandwick CEO Gail Heimann in the research report.

Think Like a Stakeholder


If, in fact, company executives hope to embrace a broad number of stakeholder considerations—like workers, the environment, the effects their business decisions have on the overall economy—then they need to think like those stakeholders, argues Harvard Business Review.



The Review gives us some examples: There's the utility company that began managing its environmental footprint, even at a time when demands for energy are at an all-time high. And the pharmaceutical firm that deliberately began focusing more on the well-being of patients, workers and the planet.

The Review goes on to evaluate what it calls "four value pillars" that can strengthen a company in the long term: financial value (think costs and capital allocation); customer value (think brand and trust); people value (think about workers' loyalty, health and engagement); and societal value (think how a company affects a community, the planet's resources or human rights).

"The days of focusing solely on the shareholder are over," the Review writes, noting that the "four value pillars" answer two questions for C-suites, boards and investors:

"What will drive—or destroy—value for the business in this next era? And how can the business be aligned around a wider, stakeholder-driven agenda?" the Review asks. "Of course, executives still must keep an eye on short-term performance. Indeed, for most businesses, running a lean and profitable core is vital to driving transformative investments. But we expect corporations that focus on a broader set of stakeholders will perform better—in the short, medium, and long term—and will be rewarded in the marketplace with lower costs of capital, better human capital engagement, and, in the long run, differentiated growth in enterprise value." 

It Takes More Than Financial Metrics to Predict a Company's Future 

Just about any article one reads these days pays homage to the impact the COVID-19 pandemic has had on how companies respond to their stakeholders.

A recent article by tells the story of the CEO of a company that offers cafeteria-style food management services to large businesses, universities, hospitals and senior citizen centers.

It doesn't take much to imagine what happened to this company once COVID-19 entered the picture: What need for food at universities, colleges and businesses if most students and workers were sent home? Many hundreds of furloughs ensued. And while the enterprise had previously raked in about $100 million a year in revenues, this CEO saw his business "almost totally evaporate overnight in April 2020," according to the article.

As he looks to the future of his business, this CEO realized that he had to break "from the traditional financial metrics he relies on to comprehend business opportunities and risks. As a result, this year may prove to be a turning point in the decade-long rise of nontraditional 'soft' ways of evaluating performance."

What might this look like?

It could mean evaluating workers' anonymous opinions about their managers and executives, taking those opinions to heart, and actually doing something if those assessments are less than glowing. Or it could mean taking employee stress—and the burnout and mistakes and short fuses that come with that stress—far more seriously.


​An organization run by AI is not a futuristic concept. Such technology is already a part of many workplaces and will continue to shape the labor market and HR. Here's how employers and employees can successfully manage generative AI and other AI-powered systems.