"The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy." — Martin Luther King
Andrew Ross Sorkin recently wrote an article in the New York Times exploring why business leaders privately criticize Donald Trump, but say nothing about him publicly. The article featured an exception to that rule. Reid Hoffman, the co-founder of LinkedIn and world class venture capitalist, publicly denounced Mr. Trump and pledged $5mm to veterans’ groups if Mr. Trump releases his tax returns.
The article debated whether a CEO should criticize (or support) a presidential candidate, especially one as flawed as Mr. Trump. Mr. Hoffman labeled his denunciation of Trump “courageous” as he risked personal and corporate attacks from Mr. Trump and his supporters. While courageous, criticisms of Trump leveled by CEOs in the current political environment are simply not effective. In fact, if the CEOs of all major companies came out in favor of Hillary Clinton it would take one 3:00am tweet slamming the “elites” to turn that endorsement against them and her. Indeed, Mr. Hoffman’s offer was met with a response that went something like, “if you like veterans so much then just donate the $5mm to them, without conditions.”
This is not to say that corporate CEOs should be off the hook. The collective power and influence of the corporations they run is enormous. Fortune 500 companies alone generate over $12 trillion dollars of annual revenue, which accounts for 70% of annual US GDP and is bigger than the GDP of Russia, Italy, UK, Brazil and France combined! Fortune 500 companies employ over 27 million people — the equivalent of one in five American workers. The oldest company in the Fortune 500, Bank of NY/Mellon, pre-dates George Washington’s presidency. Presidents come and go, but the American corporation endures.
Mr. Hoffman and other CEOs can take a more effective path toward influencing this country rather than engaging directly in the political realm. Simply put, they must run their own companies well. What do I mean by this? I mean that CEOs must do more than focus on short term profits and executive compensation. They must also value highly their employees, customers and communities. If more CEOs took all of these constituencies into account, it is fair to say that the environment that gave rise to this toxic election season may not have existed.
What I would like to see from Hoffman and the CEOs of other major corporations is (i) an understanding that what is good for the people of this country is also good for business and (ii) actions supporting that understanding. These CEOs would see that the incumbent Congress is dysfunctional by choice — unwilling to pass common sense laws necessary to address the myriad of issues facing the United States of America. Thus, looking to Congress as the means to cure America’s socio-economic anxieties is futile. These CEOs would also see that the some of the causes of current socio-economic anxiety — a widening social divide fueled by gross income inequality and workplace unfairness — can be ameliorated by corporations acting responsibly and independently of government. Finally, these CEOs would recognize that a mere good faith effort in this regard would go a long way toward restoring trust in corporate America.
So here is an approach (in the form of a letter to the American worker) that I would like the CEOs of major corporations to consider.
“To Our Fellow Americans,
We have listened to the candidates over the past year, and more importantly, we have listened to the voters in this country and have concluded that there needs to be a more fair relationship among business and American workers. We recognize that economic anxiety and a widening income and wealth gap is undermining our core values thus threatening the long-term health of our companies and our country. By signing this letter, we agree that our companies will endeavor to adopt policies that address that ensure the following:
- A Living Wage
- Profit Participation By All Employees
- Executive Compensation Reform
- Equal Gender Pay
- Education and Job Training
We intend to have a dialogue with all stakeholders, including shareholders, customers, employees, vendors, government and the community and to construct our policies balancing the goals and concerns of each. Moreover, this is by no means an exhaustive list of concerns, and we look forward to addressing other matters in the near future.”
I am sure that 500 CEO’s could come up with a better letter. Let’s hope they try.