Corporate America Develops a Conscience?

By Frank Sherman

There has been a lot of media coverage this week of the Business Roundtable CEOs new commitment and statement on the purpose of corporations. Leaders of companies including JPMorgan Chase, Apple, Amazon and Walmart have abandon their 40+ year sole focus on shareholders to embrace a “fundamental commitment” to all their stakeholders: putting employees, suppliers and communities on a pedestal that once belonged only to shareholders.

Anand Giridharadas, author of Winners Take All: The Elite Charade of Changing the World, has been an effective critic of the statement.  “I absolutely see the change. It has become socially unacceptable as a company or a rich person not to be doing good. But what many are failing to do is ask: ‘What have I done that may be drowning out any of the do-gooding I’m doing?’ ” (Fortune, Aug 19, 2019). He cites the 2017 tax bill, supported by the Business Roundtable, in which the lion’s share of the benefits ended up in the hands of the top 1%, increasing the income inequality underlying many social problems.

The ‘enlightened’ CEOs are also taking heat from the right. The Wall Street Journal editorial page was quick to criticize (WSJ, Aug 19, 2019)… “A close reading shows there’s less substance here than meets the media spin, but it’s still notable that the CEOs for America’s biggest companies feel the need to distance themselves from their owners. Yet these CEOs are fooling themselves if they think this new rhetoric will buy off Ms. Warren and the socialist left. It may even embolden them by implying that corporate rules that require a focus on achieving value for shareholders are somehow morally insufficient.”

But Steven Pearlstein, Pulitzer Prize-winning columnist for The Washington Post, professor of public affairs at George Mason University, and author of the book Can American Capitalism Survive? has a different take from the BRT statement. His article in the American Prospect five years ago (When Shareholder Capitalism Came to Town, Apr 19, 2014) partly blamed the BRT for corporate America’s sole focus on shareholder value leading to the corruption of capitalism. However, Pealstein was optimistic about the BRT statement. “It’s important because it signals a shift in attitude in norms. That’s already occurring. It’s sort of confirming something that’s happening that’s, I think, the pendulum swinging back in the right direction, after having swung too far in favor of shareholders.” Pealstein met J.P. Morgan Chase’s CEO and chair of the BRT, Jamie Dimon, in his office last year to discuss the growing public distrust of corporations and CEOs.

When asked by PBS host John Yang if this may just be a P.R. gimmick, Pearlstein gave some practical advice that all stakeholders can benefit.  “Yes, it is good for P.R., but if they don’t follow through, if we continue to see companies that say, I’m giving up my American citizenship so that we don’t have to pay U.S. taxes anymore because our shareholders are making us do it; if companies say, we’re going to crush our unions because our shareholders are making us do it; they won’t be able to get away with that anymore.”

It’s up to us to remind these CEOs of their new found conscience!

What Story Do We Tell?

For an author and former tech company executive, Seth Godin has a no frills blog that offers pithy insight. In a podcast some years back, he observed the following:

“Once you have enough for beans and rice and taking care of your family and a few other things, money is a story. You can tell yourself any story you want about money, and it’s better to tell yourself a story about money that you can happily live with.”

SGI is an organization for those who want to tell a different kind of story about their money than a simple report on the bottom line. Our members are those who want their investments to tell a story consistent with the values and passions of their lives. Our members have served those on the margins in far-flung missions or just on the other side of town. Our members have run schools to provide a quality education, inspired by faith, to those who might not otherwise be able to obtain it. Our members have built health institutions that have served the ill and injured regardless of their capacity to pay. Our members have worked tirelessly to care for and to protect creation. Would it not make sense that the savings destined for their healthcare and retirement, and those funds entrusted to them by generous donors, be used in ways that reflect what our members believe to be important?

Once upon a time, I used to urge folks to look through the last ten checks they wrote—now, I’d suggest that younger readers look through the credit card statement—what do those expenditures say about our priorities and values? The work of SGI is to tell a story with our funds. It is a story that values the poor so often invisible within the economy, especially vulnerable children and women. It is a story where the Earth, its soil and seas and air, is more valuable than the gold and oil buried underground.

A story that focuses solely on the economic return is a story too thin to heal. Indeed, we need a story rich enough to live by. Our story will not interpret the world to everyone’s satisfaction. But, finally, in our judgement, their stories can’t stand up to our stories.