Microsoft's CEO Satya Nadella
  • Microsoft CEO Satya Nadella said Wednesday it was time for a "referendum on capitalism."
  • Companies should grade themselves on the jobs they create and the benefits they bring about for society, rather than just their profits, he said.
  • "We all have to recognize what is that social core purpose of a corporation," he said at the Forbes JUST 100 virtual summit.
  • Visit Business Insider's homepage for more stories.

Microsoft's CEO Satya Nadella thinks it's time to rethink the way capitalism works.

On Wednesday, he called for "referendum on capitalism," and urged businesses to grade themselves on the wider economic benefits they bring to society, rather than just their profits.

Microsoft and others should measure their success by the jobs they create, the revenue they generate for their suppliers, and the money their employees spend elsewhere, he said.

"It's fair, in today in 2020, in the midst of this pandemic, to essentially have a referendum on capitalism," Nadella said at the Forbes JUST 100 virtual summit.

"We all have to recognise what is that social core purpose of a corporation."

Nadella, who has served as CEO since 2013, gave the example of shareholders supporting Microsoft's pledge to become carbon neutral by 2030.

His comments come amid a wider demand for "stakeholder capitalism," where companies focus on the needs of all stakeholders, including wider society.

This was the theme for this year's World Economic Forum event in Davos, where leaders credited the movement in part to the "Greta Thunberg effect", and the increasing urgency of addressing climate change.

In August 2019, nearly 200 CEOs of large companies, including Amazon and JPMorgan Chase, signed Business Roundtable guidelines that described how organizations should "promote an economy that serves all Americans." 

Nadella also discussed Microsoft's commitment to democracy.

"As an American company — and tech company — our standing in the world, and in the United States, comes because of the vibrancy of the American democracy," he said.

"So therefore any standing of any business, including ours, depends on us building on that strong institution of democracy here and everywhere else," he added.

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