Business Roundtable

The Business Roundtable is the leading association representing the interests of big business in the United States. Founded in 1972, the Roundtable derives its strength from its organizational structure. As opposed to most other Washington, D.C.–based industry and trade associations, the Roundtable maintains a very small staff. Its policies and activities are driven by its [Page 250]membership—in this case, chief executive officers (CEOs) of 150 to 200 of the largest corporations in the United States.

The Roundtable was the result of a merger of three other big business associations. The Construction Users Anti-Inflation Roundtable and the Labor Law Study Group represented major U.S. corporations in the late 1960s and early 1970s, when the foremost concerns of big business were the increasing costs of labor (particularly in construction) and the political activities of labor unions, which were attempting to strengthen their protection under federal labor law. Following the passage of a series of laws and the creation of new federal regulatory agencies in areas such as consumer protection, environmental protection, worker safety, and employment discrimination, a third association—the March Group—was formed to counter what CEOs perceived to be a decline in business political power.

The consolidation of these three groups was intended to (1) decrease fragmented political power among conflicting industries, (2) educate big business on the new politics of regulation in the 1970s, and (3) coordinate big business political activities. It achieved these goals by restricting Roundtable membership to CEOs of only the largest companies and maintaining the locus of the decisionmaking and political activities in the hands of the CEOs themselves.

Within a few years, the Roundtable had demonstrated its organizational and political success by leading the efforts to defeat a proposed Consumer Protection Agency, to rebuff labor efforts to amend federal labor law, and to reduce corporate taxes. In the early 1980s, the Roundtable devoted its energies toward reducing federal regulation and addressing the concerns of increasing federal budget deficits. By the mid-decade, corporate CEOs found themselves under attack by agency theorists, who blamed the decline in the U.S. economy on the strategic decisions of U.S. corporations. Aided by institutional investors and armed with a politically accepted finance theory, leverage buyout companies formed to challenge CEOs in the “market for corporate control” by threatening to take over and dismantle corporations. The Roundtable counterattacked by lobbying state legislatures and acquiring protection from what they characterized as “hostile” takeovers and testifying before Congress that these takeover threats posed real dangers to the U.S. economy.

In the mid-1990s, the Roundtable found its political power waning in the midst of Republican congressional victories. Congress, the House of Representatives in particular, was more politically in tune with the interests of small rather than big business. The Roundtable was displaced by the National Federation of Independent Business as the leading pan-industrial political association. Responding to this weakening of its political power, the Roundtable refocused its activities to support the policies of the congressional leadership and the Bush administration. In doing so, it reacquired its political status and success.

The Roundtable was not only heavily involved in the political debates over corporate governance in the 1980s and 1990s, but it played an important role in the philosophical debates as well. In 1981, the Roundtable advocated what became the definitive stakeholder model of the corporation, with managers balancing the interests of the various corporate constituencies. By 1997, the Roundtable's CEOs had redefined their “paramount role” as serving the interests of shareholders, whom they now claimed were the “owners” of the corporation.

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