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Harrop: Healthy democracy in best interest of corporations
By Froma Harrop
Published: April 26, 2021, 6:01am
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Senate Minority Leader Mitch McConnell had a warning for American business: “Our private sector must stop taking cues from the Outrage-Industrial Complex.” The sector’s complaints centered around Republicans’ going state to state to undermine free and fair elections.
And so, are companies outraged? Damn straight they are. They have good reason, and it’s not because their chief executives are “woke” or the left pressured them. It’s because a healthy democracy is in their corporate interests.
The Trump-led push to overturn the 2020 election results, Rebecca Henderson writes in Harvard Business Review, “is a threat not only to democracy, but to the long-term health of the economy and to the strength of American business.” Similar attacks wrecked democracies in Europe in the 1930s, and South America in the 1960s and 1970s, with dire economic repercussions.
American businesses, Henderson adds, “assumed that someone else would ensure that democracy, the rule of law, and the kind of robust, respectful discourse that keeps societies healthy would simply survive.”
Now they have to take up that burden.
Top executives at hundreds of companies — including giants such as Amazon, Google and BlackRock — joined to oppose voting restrictions. CEOs remain widely trusted by the American public, and the 2020 Edelman Trust Barometer found that 92 percent of employees want their companies to speak out on the issues. Amazon alone employs more than 800,000 Americans.
The corporate anger goes beyond the extraordinary piece of democratic vandalism Georgia passed last month. Drawn in the dead of night, the voting law empowered partisan lawmakers to dismiss the authority of elected county voting officials and the elected secretary of state to count the ballots.
When the CEO of Atlanta-based Delta Air Lines protested, Georgia’s Republican-controlled House voted to repeal a $35 million tax break for the airline. (The bill hasn’t gone through the state Senate, which has adjourned for the year.)
Boycott threats are flying. Some defenders of voting rights call for boycotts of companies in Georgia and other states that are making it harder for Blacks and poorer Americans to vote.
Former President Donald Trump, meanwhile, has called on his followers to boycott companies that opposed the Georgia law. He even offered a list that included Coca-Cola, Major League Baseball and Delta.
The Jan. 6 rampage on the Capitol convinced corporate leaders that a crisis was at hand. In a straw poll of 33 CEOs conducted by Yale School of Management professor Jeffrey Sonnenfeld right before the insurrection, 88 percent said that officials supporting Trump’s claims of a stolen election were “aiding and abetting sedition.” Most said they would consider cutting investment in those senators’ states, and all agreed on no longer giving money to politicians who deny the election results.
A later discussion with 120 CEOs, Sonnenfeld wrote in The Wall Street Journal, revealed that “their spirit was defiant against politicians trying to muzzle them.”
Corporate America must also consider the environment into which it seeks to draw talent. “Companies have to be aware of the views of the people that they’re trying to recruit,” Tony Fratto, founder of the communications consulting firm Hamilton Place Strategies, told Business Insider. “And the most competitive people that they’re trying to recruit — those people can go work anywhere.”
These prized workers are often labeled progressive, though one hopes that protecting the sanctity of the democratic process transcends the left-right political discourse.
“Free markets cannot survive without the … kind of capable, accountable government that can set the rules of the game,” Henderson wrote. “And only democracy can ensure that governments are held accountable, that they are viewed as legitimate.”
Corporations that defend the democracy are seeing to their own interests. But they may save us all.
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