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Can We Stop Name-Calling And Make Corporate America Great Again?

The victories of progressive Democrats in recent primary elections, especially the New York City race toppling a potential Democrat leader in the House, have energized and excited progressives in New York and across the nation, as they motivate their base for the upcoming midterm elections.

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There are many issues for progressives to be energized about. Restrictive Immigration for one, especially separating parents from their children and failure to reunite them, threats to the social safety net, health care, the environment and trade are troubling too.

But as progressives focus on issues they go beyond substance, seeking a villain or a target for their animus. There is one constituency, corporations, that if targeted yields a short term public relations gain but, if past is prelude to the future, creates more problems than solutions.

The escalating criticism and vilification of the private sector is a clear example. And the criticism doesn’t only come from the left. The reaction by some companies to tariffs, speaking out on social issues because their values and employees demand it, is vilified by the right, too.

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Of course, the private sector shouldn’t be immune to criticism from either end of the political spectrum. Bad ethics brought down companies like Enron and Worldcom and regulations must vigorously punish such actions.

However, the view that all private sector behavior is and always has been bad or unethical is, in a phrase, “fake news.”

Over a hundred years ago in the early 1900s, companies began offering employees a week of paid vacation. This was done at a time when government employees hardly got even a day of paid vacation, even on Christmas. It was not legislated or regulated it was fostered by private sector leaders who believed it would instill loyalty and improve productivity.

American Express provided the first pension plan 1875 and dozens and then hundreds of employers followed suit, again not legislated or regulated but instituted by corporate leadership.

In the 1920s, the head of Kodak distributed a third of his stock holdings to his employees, to engender loyalty and improve performance.

In the mid 1940s, in partnership with higher education leaders, IBM launched a new academic discipline called computer science and supported it with significant contributions of time, talent and resources. It helped fuel economic growth across the United States. Ten years later they opened the first integrated manufacturing plant below the Mason Dixon line in a commitment to racial diversity.

Today other companies are speaking out about climate change, gender equity, immigration and a range of social policy issues.

This is not to say that corporations don’t behave badly, they do. But then again, while some in government lead and many not for profits innovate, both of them, like businesses, sometimes exhibit bad ethics. And when they do, they deserve the same animus and corrective action we provide in response to the Bernie Madoffs of the world.

But neither sector is all bad, and to say so, is to perpetuate “fake news”

The private sector must do a lot more to innovate in the way it addresses social problems. IBM’s P TECH program, since President Obama featured it in his State of the Union address, achieved college completion rates 500% higher than the national average. It spread across the nation, serving tens of thousands of low income students across eight states.

Blackrock’s efforts to indicate it will invest and support only companies with a strong footprint in corporate citizenship will help too as will Starbucks effort to provide its employees free college tuition, or JP Morgan’s efforts to assist struggling cities like Detroit. The leadership of younger and smaller companies like KIND and Chobani are also noteworthy.

Encouraging The Good

But we need to encourage more efforts like these and stop the criticism and angry rhetoric aimed at all, not just some. Name-calling results in less leadership and less positive action as companies retreat, not lead. History shows that lobbing rhetorical grenades doesn’t make more companies follow leaders. It does the opposite. We don’t need to discourage exemplary social responsibility; we need to encourage it.

There is a better way. Toning down the rhetoric and antagonism is step one. But then we should also focus on the need for high ethical standards including the teaching of ethics at all levels, and for public-private partnerships and high quality corporate social responsibility that benefits all in society to be rewarded and recognized.

We can do more than just doing well by doing good or writing checks. We can in fact demonstrate we can go beyond simple “checkbook philanthropy” and mobilize the best and most valuable private-sector resources to solve social problems and create models of real excellence in partnership with government and civil society.

But let’s start by working together and toning down the rhetoric. This sort of “fake news” accomplishes little and in fact does more harm than good.

  • Litow is a Professor of Public Policy at Columbia and Duke Universities where he teaches courses on Corporate Social Responsibility. He was president of the IBM Foundation and former deputy chancellor of Schools in New York City and an aide to both the mayor and governor of New York. He is the author of the new book “The Challenge for Business and Society: From Risk to Reward,” published by John Wiley and Sons.

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