CEOs’ biggest challenge isn’t gaining profits but regaining America’s trust
A recent survey shows that most Americans don’t trust corporations.
The public no longer trusts many of America’s most important institutions, and they particularly distrust big businesses and the executives who lead them.
Rarely in modern history has the average American held the economic drivers of our society in such disrepute. In recent columns , I’ve come to the defense of corporations for doing their jobs, which is to develop competitive products, press for higher profits by wringing out inefficiencies and then delivering those profits to investors while maintaining the long-term health of the business.
From readers’ reactions, you would think I was worshipping Gozer the Destructor, the terrifying Sumerian deity made famous by the “Ghostbusters” movie.
Readers lectured me on my naivete for believing that a corporation could possibly have a customer’s or community’s best interests in mind. It turns out those readers represent most Americans.
More than 75 percent of adults believe that major corporations fail to protect the environment, and nearly 70 percent think corporations do not do enough for their communities, according to a
new poll by Morning Consult. The survey was paid for by the Public Affairs Council, an organization for executives whose job is to help companies contribute to their community.
Most Americans believe big companies are lousy at creating jobs, fail to serve shareholders and do not adequately compensate workers, the national poll of 2,200 people found. The only thing corporations do well, in the eyes of most Americans, is sell products and overpay executives.
“Only 6 percent believe that CEOs of major companies have high ethical standards, compared with 36 percent who believe small business CEOs to be highly ethical,” the report found. That’s a shockingly low opinion of the business world’s most successful leaders.
The challenge for CEOs, then, is regaining trust, which will be difficult in an era where denigrating others is considered the height of wit and cynicism is all the rage. A starting point, though, maybe to remind the public of what corporations get right.
Businesspeople deliver most Americans their basic needs every day, whether it is food, clothing, fuel or a paycheck. I’ve been in the poorest countries and the wealthiest, and what they have in common is good people performing commerce to deliver what their communities need.
Corporations make Americans angriest when they stand up for their self-interest. But for every factory that fights a new pollution regulation, or every energy executive that denies human-made climate change, other companies are fighting the good fight.
When demagogic politicians promoted bigotry against lesbian, gay, bisexual and transgender people, the CEOs of Google, Facebook and hundreds of other corporations denounced them. When President Donald Trump decided to strip protections from Dreamers — the people whose parents brought them to the U.S. illegally as children — CEOs spoke up in their employees’ defense.
Major automobile manufacturers, which have invested heavily in electric vehicles, have reportedly convinced the Trump administration to raise mileage requirements, not freeze them. Tech companies are national leaders in purchasing renewable energy and driving the construction of wind and solar projects.
Yes, there are plenty of bad actors out there, and we should expose and punish them. But corporations are legally obligated to act in the best financial interest of investors, which means sometimes doing unpopular things. The good news is that executives and investors are rebalancing their approach.
The Business Roundtable, made up of the most influential CEOs, recognized earlier this year that public distrust threatens their financial future. Defying Wall Street, members declared that the purpose of a corporation is not merely to make profits, but also to promote an economy that serves all Americans.
So far, we’ve seen a lot of words and not much action from roundtable members, but acknowledging that the ruthless pursuit of profit hurts long-term profitability is a first step. We can encourage them by rewarding good corporations with our patronage and punishing bad companies by electing public officials willing to act as watchdogs.
Humans like stories with good guys and bad guys, but economics and business are not that simple. Hard-to-solve problems are complicated, and we need understanding and cooperation to solve them, not vilification.
The profound distrust Americans feel toward business is worrisome and requires an antidote. If you trust no one, then there is no one to work with to make the world a better place. That’s when nihilism takes over, and everything only gets worse from there.
Acknowledging that the ruthless pursuit of profit hurts long-term profitability is a first step.