More companies are committing themselves to social change. Is it all talk?

When the Business Roundtable last August issued a statement on corporate purpose shifting from focusing on returns to shareholder to satisfying the needs of a broader range of stakeholders, it was treated as momentous news. But were the U.S. CEOs signing the statement serious? Would anything really change?

Two academics decided to follow up, contacting the 184 companies where CEOs pledged their support, asking who was the highest level decision-maker that approved the decision – was it the board of directors, the CEO, or an executive below the CEO? Only 48 companies responded, and 47 said it was approved by the CEO, not the board.

There’s no reason to believe the picture would be much different in the non-respondents, suggest the researchers, Harvard Law School professors Lucian Bebchuk and Roberto Tallarita. And they argue the fact the boards weren’t involved indicates the CEOs didn’t regard the statement as a commitment to make a major change in how their companies treat stakeholders. “In the absence of a major change, they thought that there was no need for a formal board approval,” they report in a law school publication.

Another explanation, of course, is that the CEOs believe the statement is what their corporations are already committed to. In his just-released book The New Corporation, UBC law school professor Joel Bakan writes about how companies have been trying to present a different face in recent years, more compassionate and committed to social ends. “Visit the website of any major corporation and you’ll wonder whether you’ve accidentally clicked on that of an NGO or activist group. These days all corporate communications lead with social and environmental commitments and achievements,” he notes.

Whether this is driven by noble impulses, or an attempt to do well financially by doing good societally, or just blarney is up for debate. You, however, may be happier working for a company that is more socially and environmentally conscious, perhaps with a high-sounding purpose and even giving you time off for volunteer activity, as some companies do.

But you may not be noticing what Prof. Bakan starkly points out in detail: Corporate actions, be it on nutrition, industrial safety or climate change, inevitably stop short of measures that could interfere with profits or contradict business models. Moreover, these new corporations have been actively hurting society by continuing to push for lower taxes, which limits the social programs governments can undertake; successfully attacking regulation in a variety of fields, from workplace safety to the environment; and undermining unionization. As well, a number get caught in schemes that flout the law, from asbestos in Johnson & Johnson baby powder to emissions cheating at Volkswagen. “The sad truth is that over the last two decades, corporations have been on a crime spree, even while claiming they have been conscientious and caring,” he declares.

Yes, you might be doing some noble things at your company but what else is happening at the same time that is less savoury? In his 2004 book and film The Corporation – there will be a film as well this time – he diagnosed corporations as psychopaths because of their legal requirement to focus obsessively on making profits. He says the new corporation is still a psychopath – just a more charming one, and thus more dangerous.

But he stresses in an interview that doesn’t mean the people who work for it are psychopaths. He offers a wonderfully Canadian analogy to help us understand our own situation as managers within the new corporation. Hockey is a violent game, combining high speed, hard surfaces, and intense physical contact. The games rules allow behaviour that outside the game – at work or in a mall – would attract criminal prosecution. But hockey players are not violent people even if on the ice the game demands some of that, and they are not equally violent.

So in the interview he asks you to act, where you can, to minimize the damage that the corporate bottom line might be encouraging. Keep to your own moral code as best you can. At his law school, first year marks must be based 100 per cent on examinations, which is anathema for him, so he works for curricular reform. If your corporation professes social values, use that to point out areas where the organization may be acting contrary to those claims: Why are we committing to better education but trying to reduce taxes that might fund it? You can also in your off hours work with social and environmental organizations committed to what you believe.

What surprised him in his research was the degree to which corporate leaders he interviewed like Lord John Browne, former CEO of BP, and Jamie Dimon, chairman and CEO of JPMorgan Chase, are sincere in their new corporation efforts. “There is a real sense of humanity while as business leaders they are doing things that to my view are highly problematic and contrary to the values they espouse,” he says in the interview. Acting fully on that humanity within corporations is a challenge many managers face.

Cannonballs

• Executive coach Marshall Goldsmith, whose clients include a famed restaurateur who has just declared bankruptcy for three of his establishments, says it’s important to recognize some time you lose. Sometimes the environment is so bad you must pull the plug.
• Consultant Mike Kerr warns you to be careful not to create camps between people choosing to work from home and those in the office – the “homers” and the “officers,” as he calls them. Don’t judge people on their choice and make sure those working remotely aren’t remote but feel included.
• Instead of behavioural interviews, which probe the past, recruiting expert John Sullivan encourages “how will you act today?” questions. For example, instead of asking, “Tell me about a time when you successfully led your team?” substitute, “you will be leading a team with some people in the office and some working remote. How would you lead a team process pivot with dramatically reduced resources in today’s turbulent environment?” And if you do ask a behavioural question about their past work, follow up by asking what they would do today.

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