Corporate Responsibility in a Post-Government Era

In his essay in The Guardian, “Demise of the Nation State,” novelist Rasana Dasgupta argues: “The most momentous development of our era … is the waning of the nation state: Its inability to withstand the countervailing 21st-century forces, and its calamitous loss of influence over human circumstance.”

It is Dasgupta’s theory for why political norms are being shattered, why populism is on the rise and why, since 1989, 95 percent of the world’s wars have been due to national breakdowns rather than foreign invasion. It’s a “post-government” point of view not unlike that expressed by Apple CEO Tim Cook, who also sees the trend as a harbinger of greater corporate responsibility. Cook told The New York Times in 2017 that government has “become less functional and isn’t working at the speed it once was.” He pointed out that it now falls to businesses and the rest of society to step up and fill the void.

Other business leaders appear to share this view. Earlier this year, Amazon’s Jeff Bezos, Berkshire Hathaway’s Warren Buffett and JPMorgan Chase’s Jamie Dimon created an alliance to address what they see as a failure of the US government’s ability to reduce the cost and complexity of healthcare. While the alliance will focus on providing healthcare for employees of the three industry giants, the three CEOs view it as setting an example for the nation. “The ballooning costs of healthcare act as a hungry tapeworm on the American economy,” Buffett said in a statement announcing the alliance. “Our group does not come to this problem with answers. But we also do not accept it as inevitable.”

Beyond Thoughts and Prayers

Results from the ninth annual G&S Sense & Sustainability® Study show that U.S. consumers are also losing faith in government and voicing greater confidence in business leaders to respond to public emergencies. When asked to compare their perceptions now to those of five years ago, only one-third (36 percent) expressed confidence when it comes to elected officials promising action beyond thoughts and prayers after a public emergency. Conversely, nearly half (47 percent) expressed confidence in the ability of business leaders to offer action in response to a public emergency.

The Flint, Michigan, water contamination crisis illustrates why consumers may feel this way. Only about 1 in 5 people (19 percent) polled in the Sense & Sustainability® Study feel certain they can safely drink the water in Flint, three years after the government acknowledged the water was contaminated with lead and began remediation efforts. While the local and state governments debated fault, companies such as Walmart, Coca-Cola, Nestlé and PepsiCo began donating water to meet the daily needs of Flint residents. As of this summer, Nestlé Waters North America was still delivering three truckloads of water a week to the citizens of Flint with plans to continue to do so through the end of the year.

From Floor to Ceiling

Given that companies have long relied on government to establish ground rules for market access while consumers have looked to elected leaders to provide safety nets, this new paradigm of company-as-protector creates a whole new set of expectations for organizations and how they engage stakeholders. Where in the past companies often relied on “we follow all applicable government regulations” boilerplate language to address their responsibility around environment and social issues, that’s no longer acceptable. With trust in government diminishing, regulations may seem, at best, a floor for expectations at a time when consumers and investors expect organizations to reach for the ceiling.

B2Bs Need to be Buff

As consumers’ expectations rise, so do the expectations of the top brands for the many small-, medium- and large-sized business-to-business (B2B) enterprises in their supply chains.

Often in highly regulated industries that supply feedstocks, components, packaging and transportation services, these supply chain companies maintain a symbiotic relationship with government in which the roles of government and company remain much as they have for the last several decades. Communications professionals within these companies need to do heavy lifting to help their organizations define credible ways to look past what government requires to what citizens demand and how they are uniquely positioned to contribute.

In the book “The Naked Corporation,” Don Tapscott and David Ticoll explore the democratization of free information and how it increases the discovery and scrutiny of business practices, advising companies that “You’re going to be naked, so you’d better be buff.”

The best way to get buff? Look in the mirror. View the company as a customer, employee, community member or investor may see it if stripped of government oversight. Would the purpose and actions of the company align with the expectations of these stakeholders based on their environmental and social concerns? If not, how can you achieve alignment?

Borderless Insights

This need to self-evaluate and keep pace with the global expectations of diverse groups makes the collection of insights critical. Customer research remains an imperative, but understanding current events, geopolitical challenges and activists’ campaigns is increasingly important, even for companies far from the consumer counter.

In his essay, Dasgupta points out that in this era of global financial and technical integration where the same products are available in every country of the world, “politics” still refers to what goes on within sovereign states, keeping what he calls “the antique faith of borders.” Perhaps that’s why governments are losing respect and companies are being held to higher standards – people anticipate that companies have insights and influence well beyond local, regional and even national borders.

Whether we are truly entering a post-government era or this is just a momentary spasm of societal unease, companies that look beyond the borders of their enterprise to participate in improving human circumstance will be rewarded. People only have an opportunity to vote at the ballot box once or twice annually, at best, but they vote with their wallets daily. In order to win that recurring “election,” companies must meet their customers’ heightened expectations of positive social contributions.

 

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    Ron Loch is Managing Director, Chicago, G&S Business Communications. In a competitive global marketplace, Ron helps businesses gain by doing good. A G&S veteran, Ron’s collaborations with global Fortune 1000 companies and green business start-ups have delivered strategic, integrated programs to gain value from sustainability efforts and commercialize clean technologies. Ron oversees publication of the annual G&S Sense & Sustainability® Study, which gauges public perceptions of the corporate commitment to environmental and social responsibility. He also moderates many of the firm’s thought leadership events, which have welcomed speakers from Businessweek, Burt’s Bees, Verizon, Time Magazine, The Sustainability Consortium, The World Food Prize Foundation, U.S. Green Building Council, U.N. Global Compact, and more. Ron graduated with a B.S. in Journalism and Mass Communications from Iowa State University and received a Master’s Certificate in Managing the Sustainable Enterprise from the Illinois Institute of Technology Stuart School of Business. He has also completed the certified GRI sustainability reporting curriculum. Ron hones his crisis management skills by tackling obstacles in Spartan races.

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