Perhaps it’s coincidence, perhaps not. Either way it was noteworthy when two recent columns in two prominent papers took on the same subject at the same time: bad leadership. Bad leadership not in the political realm but in the corporate one. Both columns were about leaders who were good at leading in business but bad at leading more generally. At assuming significant or even modest responsibility for society at large.*
The underlying questions are not new: Have capitalism – and, concomitantly, the masters of the universe – run amuck? Have they in the last half century led us to a place of such inequity in wealth – a handful at the top unimaginably rich and the rest of us far, far less rich, or maybe not at all rich, or maybe even poor – that it, capitalism, and they, corporate leaders, can no longer be defended? Further, can it reasonably be claimed that market inefficiencies and inequities – the rampant unfairness – are in good part to blame for the dangerous tribulations of liberal democracies?
What distinguishes the articles to which I refer is that the questions they raise pertain particularly to leaders. The first is by Peter S. Goodman, whose piece for the New York Times is titled, “C.E.O.s Were Our Heroes… At Least According to Them.” The leader he especially takes on is Salesforce’s Marc Benioff who, as Goodman correctly observes, has long depicted himself as a leader who is singularly enlightened. Indeed, Benioff claims a special place in heaven for business leaders generally, describing them, apparently with a straight face, as the guardians of human progress. “In the pandemic, it was C.E.O.s in many, many cases all over the world who were the heroes,” Benioff said. “They’re the ones who stepped forward with their financial resources, their corporate resources, their employees, their factories, and pivoted rapidly – not for profit but to save the world.”
To Benioff’s assertion there is some truth. Still, it is equally true he seems oblivious to how much he personally has benefited from public goods and services, and to how little he and others of his ilk have had to sacrifice. The fact that leaders like Benioff pay so little (or even nothing), certainly relatively, in taxes, means they effectively starve governments at the federal, state, and local levels of the resources they need even to begin to level the playing field. Benioff then, far from being socially enlightened, a force for good in the world, is instead, Goodman charges, “an enabler, a beneficiary and a custodian of the world as it is.” In this Benioff is like other rich-as-Croesus corporate leaders: In theory, in his head, enlightened. In practice, in the real world, not so much. Or not at all.
The second article calls on leaders to refrain from refraining from politics. This one, titled “Business Leaders Have to Play a Better Political Role,” is by Martin Wolf, a regular columnist for the Financial Times. Unlike Goodman, Wolf does not single out anyone. Instead, he takes on corporate leaders as a class that should no longer, can no longer afford to stay on the sidelines of democratic discourse.
Wolf makes the critical connection between capitalism and democracy. Essentially, he argues that if we permit the former to run amuck, it will have devastating consequences for the latter. Wolf points out that business leaders are highly influential in setting public policy in areas such as company and competition law, financial and environmental regulation, and, of course, in taxation. But their influence is not objectively grounded, it is subjectively driven. Driven not necessarily entirely but largely by self-interest, their own interests and those of the companies they lead. The result of this imbalance of power and influence is a highly unequal distribution of rewards and, at the same time, a shift of risks onto the backs of ordinary people.
Wolf is a capitalist. He believes in capitalism and makes clear he considers it superior to other economic systems. At the same time, he now sees capitalism, especially but certainly not exclusively in the U.S., as badly in need of repair. Again, his column was written with private sector leaders in mind – leaders who should ask themselves these questions:
- What am I as in influential individual, business leader and member of business organizations doing to increase the capacity of my country and the world to make sensible decisions in the interest of all?
- Am I mainly lobbying for special tax and regulatory treatment for our own benefit or am I supporting political action and activities that will bring the people of my divided country together?
- Am I prepared to pay the taxes that our success makes justifiable, or am I exploiting every loophole that allows me to assign profits to tax havens that have contributed nothing to our success?
- What am I, my business, and the organizations I am part of doing to discourage online harms, corruption, money laundering and other forms of dangerous and indeed criminal activity?
- What am I doing to support laws that will bring accountability to rogue business organizations and their leaders? What, above all, am I doing to strengthen the political systems on which successful collective action depends?
Far be it from me to lay blame for everything that has gone wrong with capitalism and democracy entirely at the feet of leaders. This is a systemic issue, with blame, or responsibility, to go around. I include in the mix followers, ordinary people, and changes in the context, especially in technology, that make sustaining healthy capitalism and viable democracy newly difficult.
Still, leaders, all leaders, must be held accountable. Ideally governments, political leaders, should be fixing what ails us. They should be addressing the harm that capitalism as currently constituted inflicts on democracy. But, alas, they are not, certainly not in the United States, up to the task. In fact, in good part it is they who are responsible for why we are where we are. Moreover, they give us no reason to expect they will, they can, perform better in the near future than they did in the recent past.
Which brings us back full circle – to business leaders. Especially those with outsized power and influence. Am I, along with Wolf, being naïve in believing they can change? Is it too much to expect they will assume greater responsibility for society, for a healthy democracy and a balanced economy, than they have up to now?
This much is in any case sure. If corporate leaders remain on the sidelines, content to dabble in being responsible – their newfound proclivity for substituting the word “stakeholder” for “shareholder” does not quite cut it – Houston, we have a problem. It’s one thing to have bad leadership in one realm. It’s another to have it across the board.
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*The link to Peter Goodman’s article is here: https://www.nytimes.com/2022/01/13/business/davos-man-marc-benioff-book.html The link to Martin Wolf’s column is here: https://www.ft.com/content/4b844f8b-4906-46b4-81e5-059a4d8d4eb6 .The italicized questions are quoted from Wolf’s column.