THE FOLLOWING PRESENTS SOME PERSONAL THOUGHTS ON THE ROLE BUSINESS LEADERS AND CORPORATIONS SHOULD PLAY ON MORAL AND SOCIAL ISSUES
We were presented with a real drama in the States of Indiana and
Arkansas, as legislation was adopted and then quickly modified which threatened
to give license to business organizations to refuse service based on their
religious principles to gays and lesbians. A broad array of business and business leaders objected to
this, including the nine leading businesses in Indiana, WalMart, Apple, and
many others. New legislation was
quickly introduced (or that in Arkansas modified) to explicitly indicate that
this “religious freedom” legislation could not be used to discriminate against
marriage preference.
During the same week, Starbuck’s CEO, Howard Schultz, passionately
expressed his and Starbuck’s
recognition of same-sex marriage. He based his position primarily based on its being the right and fair action to take for his very diverse group of
employees. His statement drew broad support but also criticism, with the latter
usually being couched in terms
that said Starbucks should stick to serving coffee.
This set of events raises some important questions. To what extent do businesses have the
right and indeed the obligation to voice their position on moral or ethical grounds
to sway public policy? How does
business strike the right balance between its values and abiding with an
existing social policy, imbedded in law and perhaps embraced by a large
percentage of the population, including its employees or customers?
Getting down to cases, as CEO in 1998, I reached the position that
Procter & Gamble should provide equal benefits to the dependents of individuals in a
codified same-sex partnership. We
did this at a time when the majority of Ohioans opposed same-sex marriage. We were not taking a position that
these individuals were wrong in their belief. We were taking the position that the same-sex partnership as
it was codified made it right in the name of fairness to accord our employees
in such a partnership the same benefits for their dependents as a married couple would have. This decision proved fairly controversial, but I was confident that it was right to do. We
were not making a moral pronouncement on same-sex marriage at this time. We were saying that in the name of
fairness there was no reason to deny individuals in this relationship same-sex
benefits.
A related issue being debated at the moment relates to the “personhood” of a
corporation. Is a corporation a
“person” or not? Or, the question can be taken even further: does a
corporation have a “soul?”
Many, perhaps most, would say, no, a corporation is not a
“person.” As one columnist said
cryptically, a corporation won’t be a “person” until it is capable of being
executed in the State of Texas.
Where do I stand on this issue?
It depends on what you mean by “person.”
I would say that business has a “responsibility” as part of society to
advance and act on positions that are consistent with what as a corporate body (leaders,
board of directors) represent correct moral values? I say this because corporations play a major role in
forming the cultural and value-based character of a society.
I do believe that corporations need to be humble and circumspect in
taking on moral and social issues.
They have to recognize the need to balance the interests of those it
serves -- its consumers, employees, shareholders and the community.
To take an extreme example, consider a corporation's having to contemplate making a value-based decision that might severely weaken, maybe even destroy its current business. Would there ever be
occasions where it would have to go this far, to almost literally have to go
out of business? I’d say yes, if
its being in business meant threatening the life of consumers or anyone else.
In a real sense, this consideration led to P&G’s withdrawing Rely tampons
from the market decades ago.
When I say a corporation must be circumspect and humble, I mean that it
must avoid becoming sanctimonious or in any way believing that it has a role of
being a priest or prophet in its times.
It must speak judicially, and sometimes bravely, and it must avoid
failing to do the good it can do at a given point in time because it cannot
achieve perfection.
Take the situation of Procter & Gamble in Saudi Arabia many years
ago. There was a social and
perhaps even legal mandate that men and women could not work together in the
same office. P&G might have,
given its commitment to gender equality, said that it would not do business in
Saudi Arabia at all. Or, I guess
it could have taken the position it would violate the laws, though that would
not have lasted long. What did we
do? We set up separate office
locations where women would work and where men would work and they would
communicate by phone or other means between the two offices. We did this on market research and
brand work. At the same time we advocated
to change the social norms and the laws.
We believed that was right to do, not only morally (women deserved equal
opportunity) but because we were certain it would be better for the business to
have women and men working together in that way. We felt advancing gender equality was right for the business
and right morally. We kept
advancing this goal.
This raises another question: is
the test for a company taking a position on a moral or social issue whether it
is relevant to the success of the business itself in the long-term? Put differently, should businesses only
weigh in on social and moral issues when they bear directly on having the right
(and by “right” I include being morally correct) business and working
environment long-term? My answer
is yes, though I’d underscore the importance of taking a long-term
view. For example, I believe the
commitment to achieve a sustainable environment is one that businesses should
advocate, even beyond the immediate benefit of that for the business itself. Why? Because I believe businesses should understand that having a
world in which they or any other business could operate successfully long-term
requires a sustainable environment.
Said differently, I believe that a business has social and moral
obligations that go beyond simply making money in the short- or medium-term.
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