With the recent stream of investor and employee letters demanding that companies start putting purpose and profit on equal footing, Techonomy’s Jeff Pundyk dove into the central question behind corporate responsibility in his article: “Can Companies be ‘Good’?”
The story provides data showing that customers and companies alike see the need for values in business, not only for social good but for employee satisfaction and financial success. But when doing good is good for business, can a company’s good work be taken at face value? For Pundyk, authenticity is key.
Corporate authenticity becomes clearer when a company takes a real risk. In March 2018, Citigroup stepped into one of the most contentious issues in American politics: gun control. The bank said it would not do business with retailers that did not restrict the sale of guns to those under 21, with those that sold bump stocks and high-capacity magazines or that did not perform background checks. It was a measured step, yet it had dramatic impact. Citi was a rare corporate brand willing to enter a societal debate fraught with strong opinion.
AirBnb’s pledge to house 100,000 refugees and Apple’s opposition to the Trump administration’s immigration policy and data privacy advocacy stand as additional examples of companies taking authentic steps in areas in which they are qualified to speak.
Earlier this year, Laurence Fink, the CEO of BlackRock, the world’s biggest investment manager, laid down a warning to the world’s CEOs: Make societal progress part of your strategic plan or suffer the consequences.
According to business leaders like Fink, there is increasing need for companies to pick up slack left by failing governmental and political institutions. Their failures have left people turning to companies to solve the world’s biggest challenges. The good news is those expectations are relatively clear and easy to rank.
According to an annual survey of American attitudes about corporate behavior conducted by Goldman Sachs and JUST Capital,” Techonomy reported, the No. 1 value is how a company treats its workers, followed by how it treats its customers, including its position on privacy issues. Those are followed by, in descending order of importance: how much it builds its products to benefit society; the way it affects the environment; the degree it supports local communities; whether it is creating good jobs; and whether it’s well managed and pays its fair share of taxes.
When the companies fail to adhere to their stated values, employees are known to publicly hold their leadership accountable, as when 1,400 Google employees signed a letter that brought to light a secret project to build a censored search engine for China. Employee call-outs and public demand create checks and balances within this new corporate governance that seem to leave Pundyk hopeful.
What makes a company good? Employees who demand it. Customers who expect it. Society that requires it.