This article was originally published in Bloomberg Law on March 21, 2023.

Should a socially responsible corporation give primacy to shareholders or balance the interests of a broader set of stakeholders? The debate has been going on so long it might seem there is nothing new to say. Yet, in at least one area—corporate political activity—there is hope for common ground.

The Erb Institute’s new set of principles for Corporate Political Responsibility claim that common ground and offer a roadmap for more responsible participation by businesses in our political system.

Friedman’s Legacy

Half a century ago Milton Friedman framed the debate with a famous golden rule: “In a free society … there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

Clearly, Friedman was an advocate of shareholder primacy. He saw corporate agents who put any interest above the pursuit of profit as stealing from their principals, the shareholders. But his provisos regarding open competition and rules of the game made clear that he favored a do-unto-others version of shareholder primacy.

Friedman envisioned a world where corporations would enrich their shareholders by innovating, improving service and product quality, and offering value for money, while expecting others to compete on the same fair and honest terms.