Corporations Must Stand Up and Be Counted
“These late eclipses in the sun and moon portend no good to us” King Lear
In times past, the eclipse across America might have been seen as an ominous sign, portentous of the ending of an era or some approaching catastrophe. Nazis and white supremacists marching in the street, for example. Or peaceful protests turning violent and even fatal.
Since last Tuesday, when President Trump disbanded his collapsing business councils, many business commentators and private sector leaders have noted that we may indeed be witnessing the end of an era when it comes to corporations’ role in society. They are correct. A new North Star is swimming into focus, based on human, as well as financial, wellbeing.
Over the last several decades, CEOs largely took a backseat on social leadership issues to focus instead on meeting the needs of shareholders above all. Their relationship with government, for example, was essentially transactional and self-serving, and their responsibility to advocate for broader policies and American social leadership, minimal. That time is now coming to an end. Corporate silence on issues of social equity and morality is no longer an option. CEOs, and the organizations they lead, must stand up and be counted.
A lot of ink has been spent exploring the responsibilities of business leaders in times of political crisis and social upheaval. There are certainly risks involved – saying nothing can indicate complicity or weakness, while being vocal can create a target on one’s back. Taking a stance on divisive issues always risks alienating one side or another. Many argue companies should simply keep a low profile, and stay focused on making money. With every passing day, however, it’s clear that business as usual is no longer an option.
CEOs are our employers, our job creators, and our national leaders. They influence the health, wellbeing and economic prosperity of millions of people and thousands of communities, all around the country every single day. As the dividing lines between our economic, social and moral interests shift, it is becoming clear that society’s expectations for business leadership are also changing. There’s certainly a moral reason for this, but that’s not all. There’s a business reason for it too – customers, workers, communities, investors and other stakeholders all expect more. Companies that act in ways that better align with their stakeholders’ values and best interests will prosper; those that do not will face increased risks.
This is not a moral guessing game. JUST’s own survey work, conducted over the past 3 years, has provided an unambiguous and highly specific blueprint for how ordinary Americans see the role of the modern-day corporation, and what they want them to prioritize: fair pay, good jobs, support for communities, customer respect, integrity and accountability, human rights, environmental protection, safe products, and much more, including turning a profit. When asked whether companies should be advocating on social policy matters, a majority (56%) of respondents said they believe companies have a responsibility to advocate for policies that would improve their operations and society as a whole.
True leaders will recognize that their social license to operate relates directly to the bottom line. They will understand the impacts their actions have on the long-term health and prosperity of their companies, customers and employees, and the communities in which they’re operating. And they will need to walk the talk, and be willing to be held accountable for their actions of their companies, just as they are on financial performance.
Last week was a wake-up call. Now it’s up to business leaders to seize the opportunity to rebuild trust and reimagine their role in our country.
*JUST Capital will be releasing our latest polling data in September, and the full ranking of companies in the Russell 1000 on December 12.