Peter Georgescu, MBA ’63: What Matters to Me Now and Why
“I owed this country and I wanted to pay it back in whatever role my future would hold.”
Having escaped the Iron Curtain, Peter Georgescu believes in the power of capitalism — and its need to change. | Illustration by Kim Salt
Frankly, I have no recollection of the essay I wrote when I applied to Stanford GSB. But I clearly recall my feelings, my emotions, my sense of purpose.
In this ongoing Stanford Business magazine series, we ask Stanford GSB alumni to reflect on how their worldviews have changed in the years since they earned their degrees. Peter Georgescu, MBA ’63, is the chairman emeritus of Young & Rubicam and the author of Capitalists, Arise! End Economic Inequality, Grow the Middle Class, Heal the Nation.
I arrived in America on April 13, 1954. I was 15, spoke not a word of English, and had a second-grade education. But I had work experience — almost five years of hard labor as a political “enemy” of Romania. The newly installed Communist regime had found my older brother and me guilty. Our crime: having a famous grandfather, an 80-year-old former governor of Transylvania; and having parents who’d been stranded in New York when the Iron Curtain fell. Had my father, a manager for Exxon, returned to Romania, he would have been murdered, just like my grandfather and thousands of others seen as potential threats to the new government.
How I got to America is another story, but the short version is that President Dwight Eisenhower intervened to get my brother and me out of Romania. After three years at Exeter and a BA from Princeton, I was determined to become an exemplar of the useful new American. I owed this country and I wanted to pay it back in whatever role my future would hold.
Sixty years later, I feel exactly the same way. I have lived the American dream. I got to be the best Peter Georgescu I could be. Turbocharged by a Stanford MBA, I had a successful business career, serving as the CEO and chairman of a global marketing communications company, a director of numerous nonprofits, and a member of many public corporate boards.
I believe that capitalism is the greatest driver of prosperity and growth humankind ever created. It works everywhere the fundamental access to resources and the principles of entrepreneurship apply. But this powerful engine needs a governing framework that determines the beneficiaries of the abundant value it creates. My mission today is to help change the principles of corporate governance from shareholder primacy to stakeholder capitalism.
The model that built the U.S. into the dominant nation in the world was a multi-stakeholder capitalism that benefited not only shareholders but customers, workers, and communities. Everyone won — most importantly, the middle class.
For the last 40 years, the guiding corporate ethos has focused on maximizing short-term shareholder value. This drove the investor class to unimaginable heights of value creation. Yet for the vast majority of Americans, shareholder primacy has proved a socioeconomic catastrophe. Real wages have been flat for decades, spending on R&D and basic research has decreased, and productivity is slowing. Unless business changes soon, we’ll start tasting China’s dust.
I believe the answer is a capitalism where the synergistic and symbiotic relationships among the major stakeholders will produce win-win, inclusive, long-term value creation for all parties, particularly shareholders. For the past several years, my work has focused on convincing my peers of the urgency of this shift. It is also my fervent hope that the GSB will be at the forefront of teaching and advancing the art and science of stakeholder capitalism.
Now this immigrant capitalist is back to the future I dreamt about long ago — to be a good and useful American.
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