In journalism, my line of work for about a half-century, you learn pretty quickly that while words matter, you have to watch what people do, not just what they say. I was reminded of that the other day when I came across a newspaper column I wrote six years ago suggesting that we might have been on the cusp of a revolution in the way American businesses operate.
Silly me. Six years seems a political and cultural lifetime ago. Bold words have a way of vanishing in that much time.
Still, it’s worth recalling that way back in the first Trump administration, the Business Roundtable, a group of CEOs of many of the nation’s largest companies, issued a statement aimed at redefining what it called “the purpose of a corporation.” Those titans of business declared then that the obligation of business wasn’t just to generate profit, but also to do good – by investing in workers, protecting the environment and supporting the communities where they do business.
That bold 2019 statement declared: “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
Maybe we should have seen it then as just business leaders buying time in the face of a growing backlash against the manipulation of consumers. You still see that today: On both the right and the left, politicians draw cheers when they take aim at big corporations.
But there was a moment a few years ago when there seemed to be a genuine reappraisal of the role of business by business leaders themselves. There were thoughtful questions about the doctrine articulated in by the Nobel-winning economist Milton Friedman – which he laid out in a 1970 piece entitled, “The social responsibility of business is to increase its profits.” That was the cornerstone of the Friedman Doctrine, or the “shareholder primacy” model of capitalism – the notion that, as long as it was legal, the only task of any business was to make money for shareholders.
Back in Donald Trump’s first term, business leaders seemed to be questioning that notion. Then, as now, the U.S. government was stepping back from taking on the big issues – namely, the widespread global anguish caused by income inequality, by climate change and by political instability. The selfish nationalism of Trump’s approach was infectious – other countries mimicked it, as America turned inward – and it seemed that business leaders then wanted to step up and shoulder the load. They were going to support communities and workers and what was good for the country because it was the right thing for those who accumulate great wealth to do – and it also was good for business, because it built markets.
But somehow that seems to not be happening in this Trump term. Big business is instead kowtowing to the most transactional president in our history – a president who has personally profited from his official acts by at least $1.4 billion, according to The New York Times editorial board.
There are businesses that have handled this differently – who have built their brands by embracing corporate responsibility. Millennial Americans, and Gen Z’ers love Patagonia clothing not only because it’s cool-looking, but also for Patagonia’s actions to be, as the company promises, “more socially just and environmentally responsible.” Patagonia is a “B Corporation,” one of 9,000 businesses certified for balancing profit with purpose, not just grabbing cash however it can. Ben & Jerry’s is a B Corp, too; and so are Tom’s footwear, Athleta activewear, and Seventh Generation household cleaners. Think of it this way: B Corps are to business as organic certification is to food.
And a lot of companies that aren’t B Corps still pay attention to something beyond the bottom line. Levi Strauss cut the water used to produce its jeans by 264 million gallons a year. Lego quit a partnership with Shell over the oil company’s refusal to stop Arctic drilling.
But the responsible corporations are in the minority these days. So the question is this: Will CEOs at some point more broadly move to back up those admirable sentiments from several years ago, and look beyond this quarter’s profits? Will they, for example, raise wages, move to protect the environment, foster diversity, support justice wherever they operate?
Or should we just take their words at face value? No – not that, for sure. But this dark period, this regressive presidency of Donald Trump, will be over one day. And there will be an accounting of who simply looked to bolster their bottom line for shareholders alone, and who stood firm with a view of our broader responsibility as humans on a small planet.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.
