Last summer the Business Roundtable, which consists of the leaders of nearly 200 large American corporations, announced that it is changing its mission statement.
Rather than focus exclusively on the maximization of shareholder value, BRT members pledged also to deliver value to customers, invest in employees, deal fairly with suppliers, and support the communities in which they work.
The Roundtable’s announcement is the culmination of ten years’ effort to promote corporate social responsibility, going back to Microsoft founder Bill Gates’ call for a “creative capitalism” that makes profits and improves the lives of “those who do not fully benefit from market forces.”
Corporate philanthropy is leading important initiatives to better the quality of life. For example, Gates’ own foundation has donated billions to combat HIV/AIDS, tuberculosis, malaria, and polio around the world.
After decades of devotion to boosting shareholder value, it is good to know that CEOs are finally recognizing the needs of society.
However, the newfound commitment of corporations and the ultra-rich to public service would be more convincing if they weren’t feeding off the public trough at the same time.
The Tax Cuts and Jobs Act of 2017 cut corporate taxes by 40 percent. The rationale was that this would lead to long-term investment and growth.
Instead, corporations spent most of the trillion-plus windfall on stock buybacks. FedEx, which owed $1.5 billion in taxes for 2017, took advantage of the new tax code to owe zero taxes in 2018 without making new investments.
The timing of the BRT’s new dedication to compassionate capitalism, coming after the Trump tax cut bonanza, looks like a bank robber opening up a checking account at the branch he just looted.
Then there is the hysterical reaction of corporate chieftains to the presidential candidacies of Bernie Sanders and Elizabeth Warren. The masters of the universe believe a Warren presidency is a “terrifying prospect.”
Another Warren critic is JPMorgan Chase CEO Jaime Dimon, who says she “vilifies successful people.” Moreover, Warren’s Accountable Capitalism Act, which would make it easier to criminally charge and jail corporate executives for misdeeds by their companies, would “change the complete nature of how you run a corporation.”
By the way, Dimon is chair of the Business Roundtable.
If you think billionaires saying nasty things about Warren bothers her, check out her new ads and campaign coffee mug that says “Billionaire Tears.”
Let’s not forget that corporations and the rich have had a pretty good run over the last few decades.
CEO pay is 1000 percent higher than it was in 1965, and 278 times more than that of the average worker.
Wealth inequality has widened to the extent that the richest 0.1 percent of the population owns 20 percent of the wealth of the country, or more than the combined ownership of the bottom 80 percent.
The U.S. Supreme Court lifted restrictions on corporate political giving in the 2010 Citizens United case. Wealthy interests have outlets to contribute unlimited sums of money without public disclosure.
Big business benefited not only from Republican administrations, but also from easy access to President Barack Obama.
Recent events do not inspire confidence that a new era of woke capitalism has arrived.
Around the time when the BRT released its new mission statement, US CEOs welcomed Saudi Arabia back into the fold, one year after the state-sponsored killing of journalist Jamal Khashoggi.
Furthermore, it’s not just Wall Street that has backed away when conscience conflicted with the bottom line.
One of the world’s most socially aware enterprises – the National Basketball Association – refrained from criticizing China’s relationship with Hong Kong and its horrific human rights record when the Chinese government threatened a boycott of NBA games and sponsors.
Come to think of it, while the Trump impeachment inquiry mesmerizes the nation, where has the business community been?
Missing in action, it appears.
Capital-Star opinion contributor Fletcher McClellan is a political science professor at Elizabethtown College in Elizabethtown, Pa. His work appears biweekly on the Capital-Star’s Commentary Page.