The Corporate Boardroom is the Latest Political Battleground
We have all seen Jesse Jackson and other liberal activists use investor rights and the shareholder process and to advance their agenda. Instead of being left alone to innovate and grow, many large American corporations are spending time and treasure to defend against increasingly outrageous leftist advocacy efforts. Some political activists operating under the banners of “Corporate Social Responsibility” (CSR) and “Socially Responsible Investing” (SRI) are using the very tools of corporate governance to further an anti-capitalist program. These radical activists target law-abiding corporations with threats of boycott, negative publicity, litigation, and product disparagement unless their demands are met. Those demands are often payments to other left-wing advocacy groups.
These tactics threaten American business competitiveness and the interests of millions of U.S. investors. But too often, corporate leaders bow to the threat of bad press and pressure from these liberal insiders. For an example, check out the Citigroup Environment grants page. Where are the free market environmental environmental groups? This is not even close to balanced, and some of these groups are extremely radical socialists. Rainforest Action Network (RAN), in particular, is extremely hostile to economic progress. So why are Citigroup shareholders funding RAN, a group that suggests that Ford Motor Company is killing people?
Now, finally, some of the good guys are fighting back. A couple of entrepreneurs recently created The Free Enterprise Action Fund in response to the growing threat of the anti-business movement. The goal: to bring balance back to the corporate board room and return the focus of corporate leaders to making a profit. The Free Enterprise Action Fund, which is not affiliated with FreedomWorks or its principals (we just think they are cool) has an advocacy mission that includes (and we quote):
• “Persuading companies through our status as an institutional shareholder to resist activist pressure and to uphold their traditional duty to operate their businesses in the best interests of shareholders rather than outside special interests.
• Educating corporate managements, institutional shareholders, policy-makers, the media and the public about the threat of radical, activist-driven CSR.
• Leading anti-activist campaigns to intervene in situations where law-abiding businesses have been targeted by outside CSR pressure groups.”
Capitalism and business is about turning a profit. The measure of a “good” company is one that simply goes about its business, literally, and obeys the law. The social “good” provided by business is the creation of new products and services that people want and need. That is really it. When we ask corporate America to do other things or to become politicized, we risk our competitiveness and indeed, over time, our very economic system. We see it all the time here in Washington, D.C., as good companies become compromised in the process of seeking special tax or trade breaks.
To be sure, some liberal “Social Responsible Investing” is a perfectly legitimate and market-based activity. Many businesses have social ideals or serving certain communities as core parts of their business plan. Good for them. But when these groups start targeting companies with threats or when they push for corporate left-wing lobbying that is unrelated to business, they cross the line. No doubt, protecting shareholder capitalism is an important new battlefield in the fight to keep our liberty and prosperity.
