A Sign Of
Hope
Much has been written and said about how
corporations have lost their connection to communities.
They move from place to place depending on tax breaks and
labor costs. They externalize social costs so that, for
example, someone else pays the price of environmental
decay. They have led the attack against government
regulations, which represent the interests of the larger
social good.
I recently heard a corporation executive make some
statements that caught my attention. It was a small sign
of hope that businesses might get more deeply involved in
building community and become bigger players in solving
social problems. This is no small matter in a time when
economics and shareholder value reign supreme. The
question of whether anyone in this culture is in a
position to solve social problems is a good question. For
the most part, the primary measure of value for
businesses is their stock price, while their social
responsibility has been a marginal interest.
A Cry for Help
We are in a period where the loudest cry for
government is to get smaller and quieter. And where
businesses have been about shareholder value, individuals
are into householder value. The people who ran the
election campaigns believed that we would vote for
President of the United States based on whether we would
get another $500 deduction for our children, a $100 tax
refund and pay less for our prescription drugs. Who is to
say they were wrong?
If we care about how we build and sustain our
communities, and what we do about the large social and
economic inequities between rich and poor people and rich
and poor cultures, then businesses have to become a
bigger force. After all, transnational corporations are
larger than countries, large corporations seem to have a
lot to do with picking our politicians and directing our
laws, plus political leaders now feel honored when they
spend time with business leaders.
Getting business to place real priority on
societal concerns is no easy task. The pressure on
businesses for shareholder value runs deep. It is so
intense that famous economist, Milton Friedman, speaking
for many economists, has said for years that if a company
spent any money on solving community or societal problems
this was a violation of their compact with shareholders
and he personally would consider suing the management for
dereliction of duty.
Enter Mr. Levin
Something happened, though, this August at an
Aspen Institute conference on "Understanding
Globalization." Gerald Levin, Chairman and CEO of Time
Warner, was a member of a panel discussing globalization
and culture. He made a statement along the following
lines: He said that we have reached the point where
corporations have to start operating in the public
interest as well as the interest of the shareholders.
Since corporations hold so much of the wealth and
resources in society they are going to have to take
responsibility for such social issues as poverty, the
digital divide and the well-being of the "third
world."
He argued that social and community values have to
be built into the center of companies, on an equal
footing with shareholder values. He also spoke to the
need for corporations to respect national cultures and
stall the homogenizing impact of globalization. He went
on to acknowledge the existence of American economic
imperialism, and included himself in that category. As
actions, he recommended we:
1.
Change the laws.
2. Wake up the financial marketplace to social
responsibility.
3. Develop new corporate leadership among government,
academic, non-government
organizations and private
foundations.
Granted, his statement was buried in an
obscure panel discussion and carried over unwatched
C-SPAN, but he did make the statement. Importantly, he
said that not only will business have to play a more
significant role in worldwide education and poverty, but
that this role should stand at the center of a business'
concerns. This would mean that social and community
well-being would shift from being on the edge of concern,
where it now resides, to a central concern. The social
fabric and health of communities would then no longer be
an act of philanthropy, but would be directly aligned
with the essential purpose of a business.
This is radical. It does not matter if Mr. Levin
really means what he said, nor whether Time Warner
becomes a leader in the social responsibility of
business. The fact is, he said it. He voluntarily used
strong language and he is part of the ruling class. That
is worth marking on your calendar.
If corporations do not shift their thinking and
action, then social equity and strong community, both of
which seem important to sustain democracy, will continue
to deteriorate in the face of our abundance.
Giving Back
Now, you might think that corporations
already do their fair share, through foundations such as
Lucille Packard, Ford, Carnegie, Rockefeller, Kellogg and
the like. But these foundations are financed more through
the individual wealth of the families. Businesses
themselves give mostly lip service to community and
society concerns. For example, one of the largest donors
to social services is State Street Bank in Boston. While
they rank among the largest donors around, and are
rightly proud of their leadership, they return only 5
percent of their profits back to the community-hardly on
par with what they return to shareholders. And please, do
not argue that businesses contribute to community through
the jobs they create or the employee hours they
contribute. These are valuable, but hardly meet the
criteria of making larger human needs central to the
business.
There is no reason not to believe that Mr. Levin
was sincere in his vision of a more responsible social
role for the transnational corporation. In fact, I think
we should all write to Mr. Levin at Time Warner and thank
him for his comments. We should let him know we look
forward to hearing how he plans to follow up on his
comments. He is in the position to lead the way: He is
the boss of CNN, Time Inc. Publications and vast motion
picture resources, and with AOL as his new partner, he
has the reach to create important changes to the thinking
and values of the private sector.
Granted, if he really made poverty, hunger and the
economic well-being of the underclass a central immediate
concern of his corporation, he would be questioned, and
perhaps even sued by the financial community and Mr.
Friedman (or his successors), but maybe that would not be
so bad. It would bring the question more into the
mainstream debate. Plus, I am hopeful that C-SPAN would
carry the trial and solve the problem of what TV show to
watch in those long early morning hours.
November-December 2000
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Issue Highlight — A
Sign Of Hope
