What role do corporations play in a functioning democracy? In each administration, the answers seem to change. The Trump administration offered big companies big tax breaks – and the taxes companies pay are sure to change under the Biden administration.
But beyond money — fundamentally – what role should companies play in society? Is there a way to encourage companies to be more socially responsible?
Guest: Stan Litow is the author of The Challenge for Business and Society: From Risk to Reward. At IBM he led the global corporate social responsibility program. Litow now teaches graduate courses at the Sanford School of Public Policy at Duke University on the role of corporations in society and the politics of education. He has held high level positions for the Mayor and Governor of New York, and served as New York City’s Deputy Schools Chancellor.
On corporate social responsibility today
I think we’re at an inflection point where, as a result of changes in the attitude and behavior of our citizens, our expectations about the way corporations should behave has changed. We have many more young people coming out of the academy who don’t want to work for a company that doesn’t have strong ethical standards, doesn’t behave in a positive way. And if they have a choice, they’re more willing to go to work for a company that has those kinds of standards and activities and less willing to go to a company that does not.
The first step to corporations being socially responsible
I would say, number one is that you have to hire staff into your company that understand these activities, that understand what strong environmental performance looks like, that understand what strong investment performance, labor practices, the whole nine yards of corporate social responsibility that understand what it means to enforce it, not just within your company, but within your supply chain and all the other people that you do business with…
On how to get companies to embrace change
How do you get to the point where the private sector is going to behave like that or the public sector is going to embrace those kinds of behaviors? I think far too often when we look at our society overall, we operate in silos. The private sector talks to the private sector, the public sector talks to the public sector, not for profits talk to not for profits, higher ed, K to 12. Everybody is in a silo. I think what we don’t have, and we need to have, is more opportunities where the silos are broken down. And especially on the policy level, people are thinking and planning together about what can be done by all that will raise the level of environmental standard or diversity and inclusion. This is just something that the private sector can do. It’s something that has to get into every element of society.