Fourth in a Series: Time to Talk About the Public Interest
The TakeAway: Despite the great strides made toward incorporating environmental, social, and governance (ESG) considerations into economic decision making, these ideas are untethered from a moral paradigm or ethos or set of big ideas that can help us internalize a vision to help inspire, guide, and assess our actions. For centuries—especially with the civil rights movement (as we near the 50th anniversary of the March on Washington)—religious, theological, and ethical convictions served as the primary driving spirit, which continue to this day. Time for broadening and deepening those convictions in more inclusive ways, in the name of civic virtue and the democratic ideal.
Previously, in “Time to Talk About the Public Interest”: Notions of justice, liberty and fairness; of pluralism and diversity; of equity, “standing” and trust; of independence, vision and innovation; of freedom, self-governance and self-determination; of political stability, safety and security, were embedded in our social, cultural and political life. These virtues helped define integrity—meaning, both literally and figuratively, their integration into the fabric of community, institutional and individual life. They served as building blocks for our constitutional system of representative governance, enlivened by participation and public accountability. They were predicates, too, for our economic arrangements, because business was essentially about community.
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In the latter part of the 20th century, the echoes of these beliefs animated early shareholder activists, whether they knew it or not. Beginning in the late 1960s and early 1970s with Saul Alinsky and FIGHT Kodak,1 Campaign GM,2 Dow Chemical’s production of Agent Orange3 and the Episcopal Church,4 there were enormous social pressures on companies and institutional investors to eliminate discriminatory practices and promote equal opportunity for all. In 1971, the Interfaith Center for Corporate Responsibility (ICCR) was formed, now comprising 275 faith-based institutional investors.5
Borrowing from the civil rights movement, the public actions taken during this 1970s and 1980s were accompanied by appeals to a civic moral consciousness that radiated Judeo-Christian religious themes, but were not restricted to them. They included beliefs that:
- an all-knowing God, not mammon or the market, supersedes all authorities;
- we humans are called to an ethic of service, justice and responsibility, especially in our professional and public life—a covenant, if you will, with God and for each other;
- human rights, a belief that each of us is made in the image of God, are a fundamental part of this covenant, thus enabling us to fight against oppression and the diminution of human dignity;
- a pluralist, democratic society provides the free space—governed by the rule of just laws, subjected to ongoing critical assessment and revision—in which we respectfully work out our differences, in service to the common good;
- we are freely able to form associations—in addition to our membership in groups based on family ties, race, class or jurisdiction—and that these incorporated entities, or “corporations,” would be overseen by trustees who were accountable to the public interest obligations;
- as individuals and in communities, the covenant includes stewardship over the earthly realm of nature and her resources, another form of trusteeship that takes the long view of history; and
- our role in history is a tiny part of a longer journey toward a future destination, a New Jerusalem where life is transformed, that “city upon a hill” to which John Winthrop referred when speaking of the founding of Boston.6
We have, of course, a long journey ahead of us before truly fulfilling these ideals, and we’ve certainly made many horrible mistakes along the way. Democracy is a messy, unfolding project, and we still have much to learn, both within our own tradition and through insights gained from others, about how to do a better job.
A Belief in Moral Agency and American Faith Traditions │ But however imperfect and limited our progress, the “money and morality” movement that began more than 40 years ago sprang from many of the same religious, theological and ethical convictions that our forbears brought to public life. The idea was to make the American dream a reality and the country a better nation, with prosperity, liberty and justice for all.
Sadly, this “rootedness” in historic civic moral traditions is lacking today, despite the advances that have been made in integrating social responsibility, environmental and governance concerns across the range of economic decision-making. While we can celebrate these tangible achievements—again, those of us of a certain age never dreamed we would come so far, in what feels like a short time—we should be alarmed by the fact that they appear untethered to a paradigm or ethos or set of big ideas that can help us internalize a vision to help inspire, guide, and assess our actions.
You could argue that we have become victims of our success, and that with all this talk of metrics and indicators, of various types of “capitals”, “the movement” is in danger of losing its soul.
We need Apocalypse Now, a Revelation of the 21st century that unveils our moral compass and keeps it in plain sight.
In addition to this depleted spiritual vessel, we suffer from a vocabulary that is impoverished. It is difficult to stir people’s souls with terms such as “social enterprise”, “social impact”, “sustainability”, “ESG”, “social venture”, “materiality“, or even that workhorse of a word, “responsibility”.
While perfectly appropriate for business cards, websites or office doorways, there is no firepower in those words, no poetry, no spiritual resonance or call to action. This is in contrast to terms evoking image and emotion, such as “justice”, “truth”, “trust”, “equity”, “duty”, “sacrifice”, “liberty”.
This essay returns to the linguistic part momentarily, to show that there are historic precedents blending moral and economic meaning into one, reminding us that economic activity, rightly understood, is socially situated because it affects the life and well-being of people, of community—as well as the environment.7
Next: “Trustees Are Not Thermometers”
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Editor’s Note: This is the 4th installment of MurnPost’s Time to Talk About the Public Interest series. Part One appeared on 8/13/2013, here. Part Two appeared on 8/16/2013, here. Part Three appeared on 8/19/2013, here. It’s based on a long essay submitted to the IRRC Institute Award competition on Post-Modern Portfolio Theory, written in November 2012.
[1] In 1967, the public interest proxy strategy was introduced by the Kodak-FIGHT Campaign, demanding that Eastman Kodak Company recognize a civil rights group operating under the acronym FIGHT as the bargaining unit for African-Americans living in Rochester, NY. FIGHT used its status as a shareholder to confront management at its annual meeting, and persuaded church groups holding Kodak stock to protest the company’s resistance to FIGHT’s demands. Although the shareholder yes votes were low, Kodak soon recognized FIGHT as a bargaining agent and hired more black workers. Moreover, FIGHT’s basic elements B identification of an area of social concern; meetings and negotiation with management to correct the situation; switch to proxy machinery if negotiations are unsuccessful or break down; launch of full-blown proxy campaign to cast public spotlight on cause B were to serve as the basis for future proxy campaigns.
[2] In 1970, Campaign GM was organized by the Project on Corporate Responsibility, which initiated nine shareholder resolutions; two passed SEC scrutiny and were included in GM’s proxy statement. One proposal called for the establishment of a shareholder’s committee on corporate responsibility; the other proposed that three publicly elected directors be added to the Board. Neither proposal passed the then-SEC requirement that resolution must pass three percent threshold to enable resubmission, but Campaign GM did provoke intensive lobbying and the involvement of institutional investors, including universities, foundations (the Rockefeller Foundation and Carnegie Corporation supported Campaign GM), and pension funds. At this time, Philadelphia civil rights activist Rev. Leon H. Sullivan was appointed to GM’s Board of Directors, becoming the first African-American to occupy a board seat of a major American corporation. Rev. Sullivan soon would become a figurehead in the American-based South Africa anti-apartheid movement, organizing the Sullivan Principles as a measure of corporate commitment to victims of apartheid to rectify their circumstances.
In 1971, Campaign GM (Round II) produces three shareholder resolutions on shareholder democracy (a shareholder list of director candidates would be included with the slate proposed by GM management), constituent democracy (three directors would be nominated by constituent groups comprising employees, consumers, and dealers), and disclosure (requiring GM to report information with respect to air-pollution control, auto safety, minority hiring, and franchising practices. The proposals were defeated, but the disclosure proposal received strong institutional support from the New York City Pension Funds, TIAA-CREF, and managers representing employee pensions; the social proposals were strongly supported by the Rockefeller Foundation, Carnegie Corporation, and the New York City Bar Association.
[3] Robert K. Massie, Jr., Loosing the Bonds: The United States and South Africa in the Apartheid Years (New York: Nan A. Talese, an imprint of Doubleday, 1997).
[4] In 1971, the Episcopal Church initiates social policy shareholder proposals to three large corporations, including one with General Motors prohibiting manufacturing operations in South Africa.
[5] For nearly 40 years the Interfaith Center on Corporate Responsibility (ICCR) has been a leader of the corporate social responsibility movement. ICCR’s membership is an association of 275 faith-based institutional investors, including national denominations, religious communities, pension funds, foundations, hospital corporations, economic development funds, asset management companies, colleges, and unions. ICCR and its members press companies to be socially and environmentally responsible. Each year ICCR-member religious institutional investors sponsor over 200 shareholder resolutions on major social and environmental issues. For more information, go to http://www.iccr.org/.
[6] John Winthrop, “A Model of Christian Charity,” in Brian O’Connell, America’s Voluntary Spirit: A Book of Readings (New York: The Foundation Center, 1983), 29-33.
[7] Terms like “civic virtue” and “the common good” have a dark underbelly and are sometimes used as a justification for cultural oppression or military valor and victory. Even worse is the temptation to dichotomize civic virtue and the common good into “we-they” terms, often through mobilized opposition to other nations or peoples, something we see throughout the world as well in our nation’s cities. Perhaps a better way of thinking about “civic virtue” and the “common good” is to think of them as an assemblage of goods and virtues, oftentimes overlapping and sometimes contradictory, with each having a place within the different spheres of human existence but none representing some casuistic, absolute standard of goodness—because the absolute version of the full human good is transcendent, beyond human hands.
