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On April 14th, hundreds of U.S. CEOs added their names to a public statement of protest against a new law in Georgia that tightens access to the ballot box. The action was announced in a two-page spread in the New York Times under the headline, We Stand for Democracy. Seventy-five Black executives were the first to sign on; the signatories view the new measure as a form of voter suppression, especially aimed at Black voters in Georgia and around the country where similar measures are under consideration.

The business press had a field day with the story. Reporters called out both individual CEOs who had signed on and those missing and also a number who signed personally without invoking the name of their corporation. Communications staffs are earning their keep trying to keep it all straight: the need to manage the preferences of their leaders, and the expectations of employees who are keen to have their interests and values represented in critical debates in the public square.

The concern for the employees reaction is so acute that Doug McMillan of Walmart issued a statement to his workforce explaining his commitment to democratic principles although he had not signed on.

Not every executive is willing to harness their brand to highly divisive social issues outside of their control, but in more recent years, chief executives have issued statements or engaged in networks aimed at a host of issues with only the most indirect ties to business goals, including guns, immigration, and human rights. It seems like a new chapter in how business uses its voice, for several reasons.

One is the sheer scale of business engagement. Business leaders and groups are becoming more vocal in two key areas: climate change and racial equity.

After more than a decade of silence on a warming climate, Business Roundtable, the voice of big business in America, released a comprehensive policy statement in 2020 calling for Congress to price carbon and invest in alternatives to fossil fuels. In the wake of the killing of George Floyd last year, Business Roundtable formed a special committee of its board to identify meaningful action, including legislation to reform policing. Before this, Business Roundtable had largely stayed out of areas like climate change and avoided taking positions on social issues.

A telling moment came after the January 6, 2021 insurrection at the U.S. Capitol, when scores of corporations announced they were hitting the pause button on political spending altogether. It is not yet clear where this will lead, but at a minimum, greater transparency on political spending will become the norm.

Yet while business commitments on climate change and racial equity matter, cynicism pervades. Many citizens and activists view the call to action by business to save democracy as a form of greenwashing that in reality will not add up to much.

For this time to be truly different, CEOs will need to take these steps:

1. To be viewed as trustworthy and authentic leaders, executives must keep their promises: To overcome cynicism requires a fresh look at operating decisions and protocols, from the boardroom to the supply chain. It especially requires a willingness to explore blind spots and unexamined practices that directly impact the health of the commons and that must come out into the open to assure that the countrys economic and political systems serve the many, not just the 1%.

2. When it comes to racial inequity and creating quality jobs, business has many levers to pull: The C-suite and board control everything from who is hired or trained and the structure of jobs to the allocation of wages, benefits, and profits.

One of the third-rail issues is heavy reliance on contract and outsourced labor. Another is the design of executive compensation, which is still anchored in shareholder primacy and defies definitions of fairness. One blind spot concerns norms that return the lions share (90%+) of profits of public companies to investors and traders through share dividends and buybacks, while further enriching senior executives and squeezing meaningful investment in the workforce.

In the U.S., the growth in contract labor is a significant contributor to poverty. Board directors who aim to build trust in their companys brand will question the impetus for converting jobs to contract labor with few rights and no financial security or upward mobility. Boards should also question the purpose of share buybacks, which until 1982 were deemed illegal as stock manipulation.

Boards also should reconsider the practices and assumptions under which CEO pay continues to ratchet out of control. They must ask, What are we paying the CEO to do? and test if executive incentives and metrics support, or undermine, the creation of good jobs.

Another blind spot is about tax avoidance deploying tax advisory services to mine the loopholes such as transfer pricing. Is a company is paying for vital public services and supporting the rule of law that business leaders equate with a healthy democracy?

This is where business leaders and boards have real agency. Today, activists trying to assess the seriousness of promises made on racial equity are subject to whiplash between commitments and reality.

3. When the system itself is at risk, collaboration and new operating protocols across industries are also needed: The commitments of individual companies are worthy, even critical, but suboptimal. For example, sufficient progress on climate change will require a fundamental reset and repricing nationally and globally to send signals to both consumers and producers well beyond the net-zero goals already proclaimed by scores of companies.

For the executive working to keep his or her promises, collective action requires scrubbing the governmental relations function to assure that the policy signals, lobbyists, and membership fees, are well aligned with public commitments.

We need the support of business to modify and repeal laws that undermine worker voices and suppress the collective power once held by unions. We need business to revisit its aversion to an alternative minimum tax to support infrastructure and the safety net and education and skill building, and we need business to do everything in its power to price carbon emissions, pollution and waste efficiently, and effectively.

As citizens and as consumers we all hold business to account, but the real allies are a companys employees. Employees have a close view of the actions of their company and wield power in the complex dance between public will and private action.

It was employees, after all, who called out the hypocrisy of corporate contributions to politicians who undermined election results. On April 14th when CEOs released the We Stand For Democracy call to action, employees with a keen interest in social justice looked to see if their own leader was on the list. They call on executives to be authentic to their promises.These workers are not likely to stand down when political contributions begin anew.

Judy Samuelson is executive director of the Aspen Institute Business & Society Program and author of The Six New Rules of Business: Creating Real Value in a Changing World (Berrett-Koehler Publishers, 2021).

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CEOs speaking up for democracy is good business but employees and shareholders need to keep the pressure on - MarketWatch