Business, Politics, and Taking a Stand

The relationship between business and politics can be delicate and cautious. What’s the right balance of influence, gain, and involvement in policy?
What is the responsibility of business for society’s prosperity and stability as well its own?

These questions became acutely loaded as all the business leaders on the US President’s American Manufacturing Council resigned last week, and the council itself was then disbanded, in the fallout from Charlottesville

The CEO of Merck, Kenneth Frazier, said, as he resigned from the advisory council on manufacturing;

“I feel a responsibility to take a stand against intolerance and extremism.
America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy, which run counter to the American ideal that all people are created equal”
He was followed by the CEOs of Intel, Johnson and Johnson, Under Armour, and all the other committee members, leaders of major US global businesses.

In June, Disney chairman Bob Iger and Tesla chief executive Elon Musk resigned from the President’s strategic and policy forum over the decision to pull out of the Paris climate control agreement.

And earlier in the year, Uber’s then CEO, Travis Kalanick, left the advisory council in protest against the executive order on immigration .

For each it was both a deeply personal and a  corporate decision, around a core ethos. Lending their personal and corporate reputation is not lightweight.

Belonging to the council was no longer in synch with the principles of belonging to their organisations, or their sense of what it means to belong to their nation: a painful split forcing a decision of conscience.

It shows that business has a wider role in society and the world, setting standards for ‘doing the right thing’ alongside commercial success and generating a healthy economy.

In this, the spirit of Peter Drucker has been invoked again this week. Respected for his guidance to corporations and business leaders over seven decades, Peter Drucker’s work was shaped by a crossing with the Nazi party that made him leave his native Austria just before WW2.

He believed that business “is one of the very few institutions . . . that is not nationalistic in its worldview” and, at its best, “brings together” all kinds of people and “unites them in a common purpose.”

“To make our institutions perform responsibly,” Drucker said in his 1973 masterpiece Management: Tasks, Responsibilities, Practices, is “the only safeguard of freedom and dignity.”

This article gives an overview of Drucker’s perspective and its current relevance

Responsible business is not a fad, it hit mainstream a long time ago. What’s striking though is the firm ethical stand of the leaders and companies involved in this latest move.

Robert Wood Johnson, then Chairman and of the founding family of Johnson & Johnson, crafted its famous Credo.

in 1943. The purpose to hardwire the principles that guided decisions as a family business, before it became a publicly traded company.

As the company proudly states, “This was long before anyone ever heard the term ‘corporate social responsibility’ “.

That Credo – and the beliefs of all the organisations that resigned from the committee – was in view, as much as the personal decisions of the business leaders involved.

Our ethos shapes our sense of belonging: as individuals, as organisations, as nations. Our values and constitutions are not just a list of fine words: they’re the basis for our ethics, decisions and actions.

There is, inevitably, a tolerance point: stretch too far and it might break. Or, as here, the elastic snaps back to core ethics.

Peter Drucker’s words ring sound on the responsibility of business to lead moral as well as economic health for nations. It remains a delicate balance.

When handled with dignity and consideration, business can make a stand in a powerful way, marking their tolerance boundary. Whether or not political leaders respond, their customers and employees will: we know what we want to belong to, and where we want to spend our money.

Good business remains good business. And good businesses will be around longer than a generation of politicians.