Redefining Purpose: The Effect of the 2019 Business Roundtable Statement on Corporate Tax Strategies

ABSTRACT Business Roundtable (BRT) firms have faced intense scrutiny from investors, media, and the public following their 2019 “Statement on the Purpose of a Corporation,” which marked a shift from shareholder‐centric governance to a stakeholder‐focused approach. This shift has sparked debate over whether BRT firms are genuinely committed to social responsibility or merely using it as a branding strategy without implementing meaningful changes. This paper contributes to the debate by empirically examining a key dimension of social responsibility—corporate tax behavior. Using a difference‐in‐difference analysis covering 2004–2022, we find that BRT firms engage in higher levels of tax avoidance than other publicly listed U.S. firms. More importantly, our results indicate that BRT firms have not significantly adjusted their tax behavior since the 2019 Statement, suggesting a disconnect between their stated commitment and actual practices. Our findings provide new insights into the social responsibility of BRT firms and contribute to the broader literature on the relationship between corporate tax avoidance and CSR.