Around this time last year, I posed the question of whether companies, in addition to producing bottom line results, should be expected to improve its surroundings, spearhead charitable efforts, and contribute to the general welfare of society. While this topic is debatable, the power of the business community to actually do so is not. Businesses have a much broader reach, resource base, and capability than other types of organizations to help address the world's problems. So why then do they remain silent on most of the issues that matter? Given business entities unique strengths, shouldn't it be imperative they have a seat at the table when it comes to influencing policies and solving society's problems?
If today's climate in Washington is how government is supposed to work, then clearly something is wrong. Generally speaking, the business community has rightly stayed clear of politics. They have long subscribed to the notion of the less they deal with lawmakers, the better off they are to be left alone to manage their own businesses. Since enterprise leaders have a better handle of how issues affect people and how to craft possible solutions, this practice is a shame. Amongst the fiscal cliff debacle, it is refreshing to see business leaders come together to form the Fix the Debt coalition. A few, like Starbucks CEO Howard Schultz, have taken a stand to end lobbying and the influence of special interests in Washington. Only time will tell if its too late, but at least some business leaders are stepping out of the boardrooms. Don't get me wrong, corporate lobbying has no doubt created much of the political mess, but I think a broader effort among business could certainly help rise above the ineffective voices of partisan, agenda-based politicians.
The same sense of indifference can be seen on the charitable front. While individuals have been very active, large corporate outreach programs have typically been PR campaigns or a way to build employee morale. As movements in small business such as social entrepreneurship continue to grow rapidly, large corporations have largely been absent from newer trends in giving. Whether it be microfinance or businesslike operations like the Gates Foundation, capitalistic-based solutions have long been very effective ways in addressing the world's problems. So its too bad that the largest concerns with the most business experience are on the sidelines. Some newer companies like Google are aggressively building their foundations, but these are small efforts compared to the opportunity. And in the long run, CEOs know that a healthy macro climate creates an environment for enterprises to thrive. Just like a category leader has an obligation to grow the market, the same should be felt from corporations to affect societal change.
It's not all about giving back though; over 90% of CEOs interviewed in a recent Accenture survey linked better corporate performance to sustainability and community efforts. Certainly with larger and more complex problems looming ahead, businesses see the need to become engaged in solutions to protect the markets in which they participate. From a societal standpoint, the benefits of corporate involvement are clear - they have the resources, capital, independence, and track record to solve problems larger than what governments or even non-profits can. It is also a largely untapped resource as corporations have been inwardly focused for so long. A large resource reallocation is definitely not needed as the collective power of the business community is so great, but rather a mindset shift that focusing solely on a company's P&L may not be enough to yield the same success in the future. Perhaps with Starbucks and Google in, we can finally get the Republicans and Democrats out.