Jose Andres, owner of Think Food Group and chairman of a non-profit organization fighting hunger, World Central Kitchen, interviewed by the New York Times magazine this week.
(Q.) You had plans to open a restaurant in Donald Trump’s Washington hotel but cancelled them in 2015 after he made defamatory comments about Mexicans. Was that a business decision or a moral decision?
(A.) In this case I think my line has been: It was a business decision. But all good business decisions in the 21st century are smart moral decisions.”
Intentionally or not, Mr. Andres was channeling Mr. Ken Frazier, chief executive of Merck. Mr. Frazier, the grandson of a man born in slavery, explained his decision to leave President Trump’s business advisory group after the President’s comments on the Charlottesville violence:
Business Day The C.E.O. Who Stood Up to President Trump: Ken Frazier Speaks Out
“I think words have consequences, and I think actions have consequences. I just felt as a matter of my own personal conscience, I could not remain … I felt it was not in concordance with my views … [or] in concordance with the views we claim to hold as a country.”
Significantly, as C.E. O. of a publically-held company, Mr. Frazier sought, and won, support from the Merck board of directors; “there was unanimous support for that. My board supported
that 100 percent.”
Nevertheless, especially in the last few days, there have been many articulate explanations for the stand-alone CSR “good business case”.
John Howell, Editorial Director of 3BL Media, in his “Brands Taking a Stand” newsletter pointed to government inaction creating a national social vacuum: “… business began setting policy since government can’t or won’t. It’s a seismic shift in business philosophy …” He called it, “the overarching reputational issue for many companies.”
[Corporate reputation: a major element in soft asset valuation.]
Similarly, NEWSDAY columnist Michael Dobie – Dobie: Bottom lines under pressure :
“People now expect and spur corporations to act. One recent survey found that two-thirds of consumers say brands should speak out on issues like gun control. Another found that nearly twice as many millennials as Gen Xers or baby boomers think business leaders have a responsibility to take stands on important social issues.”
Cynics downplay the motivation and positive impact of such decisions.
AAron K. Chatterji, associate professor of business policy at Duke University is downright pessimistic and, even Jeremiah-ic, given the polarized state of society today Our Newest Cultural Warriors: Activist C.E.O.s :
“The real story is the long game. C.E.O. activism represents a historic shift in the way corporations intersect with national politics. Rather than chief executives shaping political discourse, however, our toxic political environment is dictating corporate strategy. Instead of being cast as practical technocrats who could unite us, chief executives will be swept up in our cultural war …
“Most companies are not prepared for this new world of politics … As more companies take stands, those remaining will be named and shamed on social media, creating impossible choices in an environment where neutrality is not an option.”
Some critics seem to forget the very nature of private sector companies.
They are not philanthropic institutions. They have legal and ethical — and, yes, moral — obligations to shareholders and bondholders. But in today’s fast-changing society, they also must also address the social expectations and demands employees, customers, NGOs, communities and society in general.
The near genius of the companies meeting those sometimes overlapping, sometimes conflicting, obligations is to be admired and encouraged.
Or, returning to Michael Dobie, to put it a bit more crudely: “Were [activist companies] motivated by genuine concern for the cause or genuine concern for their bottom lines? Does it matter? Yes, if it determines whether this activism perseveres or fades when there’s no clamor to provoke it.”