Editor’s note: This commentary is by Narain D. Batra, a professor at Norwich University and the author of “The First Freedoms and America’s Culture of Innovation.”
Big corporations have always tried to exert influence, directly or indirectly, on political processes at home and abroad in order to benefit their business. But in this age of global transparency and scrutiny, the cost of being caught on the wrong foot can be too high.
Both Donald Trump, the Republican presidential nominee, and Sen. Bernie Sanders, some of whose supporters are not fully reconciled to Hillary Clinton as the Democratic party presidential nominee, have pilloried Wall Street as the prime cause of job losses through outsourcing and unfair trade treaties. Donald Trump and Sen. Sanders, from the beginning of their presidential primary campaigns, have been hostile against the Trans-Pacific Partnership (TPP). Hillary Clinton has veered around the view, albeit reluctantly, that TPP would hurt American interests.
The collapse of Lehman Brothers that triggered the financial tsunami of 2008 and exposed the unethical behavior of Wall Street operatives; the ongoing VW emissions falsification scandal; Deepwater Horizon environmental calamity; the Panama Papers exposures; Fox News’ chairman Roger Ailes $40 million golden sex scandal exit parachute; and the outrageous executive remunerations when corporate America is reluctant to consider a $15 minimum hourly wage, have sullied the image of the big business.
Politics and business are intertwined and the public trust is low. In this low trust environment, nonetheless, one of the two nominees, Hillary Clinton or Donald Trump, will be the next U.S. president. There is no other choice. But Wall Street and corporate America cannot thrive in a low trust environment. Moreover, Bernie Sanders’ grassroots movement against the greed of Wall Street America and unfair foreign trade practices is not going to wither away soon. Big business has to change.
One of the most important challenges of today, therefore, is to make Wall Street and corporate America not only financially successful, but also make them behave as socially responsible corporate citizens.
To build a broad base of support for its activities and to maintain its reputation, corporate America must do honest social bridge building. The first step in corporate bridge building is to ask the question: Why are we here? The answer will embody the mission, the social reason for being there, apart from making profits.
One of the most important challenges of today, therefore, is to make Wall Street and corporate America not only financially successful, but also make them behave as socially responsible corporate citizens.
There’s always a scope for incorporating socially responsible behavior into the business strategy of a company without hurting its financial success. An open trusted relationship between a company and its various stakeholders would create better chances of withstanding hostile criticism whether it comes from well-meaning civil society groups or self-seeking politicians who depend upon corporate PACs funds for survival.
The first task of a corporate bridge-builder is to change the mindset of the top leadership about how in the long run social responsibility and sustainability policy can contribute to the company’s public image and financial strength. Creating local jobs and protecting environment is one of the best ways of doing it.
The inward looking quarterly performance-oriented corporate culture of a company must be changed to factor in the impact of its performance on the external environment including politics and local jobs. The mission must embrace the entire supply chain, including customers and suppliers. Distrust should not linger anywhere along the supply chain.
When a company focuses its attention exclusively on the marketplace, it might not pay much heed to the non-market environment in which it is embedded, and consequently it might unwittingly ignore its dormant problems. An early awareness surveillance system could capture hidden problems. The cost of neglect could be very high, as VW has discovered. The top management was obsessed with the company’s market share value and its leaders learned the lesson the hard way, costing billions of dollars.
The public is distrustful of the corporate world today. Ubiquitous media magnifies distrust. Social networks mobilize masses. Conspiracy theories spread poison quickly.
Being heard when the noise is loud is challenging. In the age of information overload and scandals, it is difficult to capture the media attention, unless someone is a Donald Trump. But even his politics stand upon his business. As former mayor of New York Michael Bloomberg said at the Democratic National Convention, “Throughout his career, Trump has left behind a well-documented record of bankruptcies, thousands of lawsuits, angry shareholders and contractors who feel cheated, and disillusioned customers who feel ripped off. Trump says he wants to run the nation like he’s run his business. God help us.” Perhaps Donald Trump would discover that business and politics are inseparable.
