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Can you just redefine the purpose of something, like, forinstance, business? The Business Roundtable did just that at the end oflast summer. It said that the purpose of business was no longer tosimply provide profits for shareholders. Instead the purpose was toprovide benefits for employees, customers, suppliers, and thecommunities around a business — and theshareholders.

Certainly the biggest companies got the message, as many of theCEOs of those companies are part of the Business Roundtable. Butwhat about small to medium sized businesses?

According to a new survey of middle market companies, they'reaware of the shift to broader responsibilities but haven't fullyexecuted on it themselves.

RSM's Q4 2019 USMiddle Market Business Index (MMBI) survey releasedrecently takes the pulse of middle market companies' views ofsocial responsibility, diversity and inclusion, andenvironmental/social/governance (ESG) criteria. Although it wasexecuted before the coronavirus pandemic, the issues it raises areas important now as they were in late 2019. And, many say, suchissues as social responsibility and ESG in the corporate world areeven more important now that the COVID-19 pandemic has ravagednursing homes, families, hospitals, and caused a near halt of mostcountries' economies.

The survey found that while middle market companies do rankdelivering results to investors as important, with 68% of companiesputting that as one of the top functions, they also say they haveformalized plans for serving additional stakeholders such ascustomers (70%), employees (74%), suppliers (56%) and communities(55%).

Still when it comes to putting things in writing, which,arguably shows at least an attempt at a greater commitment to liveup to those words, smaller middle market companies ($10 million to$50 million in annual revenue) are less likely to have thosewritten objectives and metrics for success than larger middlemarket companies ($50 billion to $1 billion in annual revenue), thesurvey found.

"Smaller companies don't yet feel the pressure to follow thebroader push for corporate social responsibility, while largerbusinesses are more likely to be held accountable by stakeholdersand typically have better resources in place to conduct a deeperlevel of analysis," said Anthony DeCandido, partner and financialservices senior analyst with RSM US LLP.

Middle market companies do support social and philanthropiccauses, the survey found, especially in the communities where theyoperate. But only 39% of executives of middle market companies werefamiliar with using ESG criteria to rank and track their company'sactivities — the same percentage from its survey in 2018.

However, familiarity does drive adoption, and of those 39% ofexecutives who say they're familiar with ESG criteria, 79% of themsay they use it to evaluate the performance of their organizationand 74% say they use it to measure the performance of otherorganizations.

The survey found that 84% of executives said they were focusedon employee diversity, inclusion, and women's issues in theworkplace, but only 53% had a formal focus on it. In fact, women'sissues, the survey found, "notably lagged behind other prioritiesacross the board, a striking finding given that women now comprisethe majority of workers on America's nonfarm payrolls."

Only 46% of companies said they were focused on women's issues,while 62% said they were focused on multicultural issues.

"As the demand and expectations for transparency andaccountability in the business community continue to grow, it isimperative companies adapt to the new normal and bake ESG intotheir strategies," said DeCandido. "Responding to these issues hasbecome even more critical in the age of coronavirus, and middlemarket companies that invest the time and resources will not onlystand out among the crowd, but will create long-term value fortheir shareholders and their communities."

The RSM US Middle Market Business Index (MMBI) is a partnershipbetween RSM US and the U.S. Chamber of Commerce and is built incollaboration with Moody's Analytics; the survey panel of 700middle market executives are polled quarterly by Harris Poll.