Private Sector Leaders/Public Sector Leanings – Frazier and Fink in Front

The trend has been in evidence for some time.  However, since Donald Trump become president it has accelerated. Increasingly leaders in business are recognizing that they cannot or, better, that they should not, divorce themselves entirely from government.

In recent decades leaders in business have been assessed according to a single, simple standard: how good they were at making money. At delivering profits to their shareholders. Other metrics – for example, employee satisfaction, environmental consideration, and community contribution – were largely discounted or even entirely ignored.

In recent years, however, this began to change. A turning point was when Kenneth Frazier, CEO of Merck, announced in August 2017, that he was quitting the president’s business advisory council in the wake of the deadly protests in Charlottesville, Virginia, about which Trump had said there was “hatred, bigotry and violence on many sides.” To which Frazier replied, in a subsequent statement that took issue with Trump’s claim that “many sides” had been responsible for what happened, “I feel a responsibility to take a stand against extremism.”

In an interview some months later, Frazier further expanded on his decision publicly to distance himself from the nation’s chief executive. Last February he said it was his opinion “that to not take a stand on this would be viewed as a tacit endorsement of what had happened and what was said. I think words have consequences, and I think actions have consequences. I just felt that as a matter of my own personal conscience, I could not remain.”  Frazier continues his quiet but consistent campaign to involve the private sector at least somewhat more directly in issues lodged in the public sector. Just days before the recent midterm elections, he said that “as a group of business leaders, we have to think about the impact to our society of what’s happening in the political discussions in our country.”  

By no means is Frazier alone in his leanings. For example, Black Rock CEO, Larry Fink, is of similar mind and early this year he went similarly public. In a by now frequently cited letter to other CEOs, Fink wrote that “companies must benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate.” Since then Fink has continued to remain committed to expanding our conception of the purpose of big business.  “I do believe,” he said recently, “that the demand for E.S. G. is going to transform all investing.” (E.S.G. means metrics including environmental, social, and governance impact.) Additionally Fink continues to predict without hesitation or reservation that E.S. G. is the wave of the future. He estimates that the change in how we measure corporate success – and, necessarily, CEO performance – “may be one or five years from now, but it’s not that far away.”

Neither Frazier nor Fink are expressing ideas that are altogether new. Notions of corporate social responsibility have been around for some time, and many companies have paid them lip service. But there is an enormous chasm between lip service and public service. If this chasm comes in the near term more clearly and quickly to close, it will be leaders like Frazier and Fink who paved the way.  

 

  

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