It’s time to reset the private sector’s relationship with politics and move forward in a way that ensures governments run on the will of the people not the power of the dollar. Reactive and piecemeal solutions won’t cut it. We need to fundamentally rethink the way businesses operate in Washington. That means dissolving corporate PACs, ending trade association and corporate lobbying, and advocating for legislative reform that will reverse Citizens United.
Trust and truth are not only critical to the functioning of democracies but to the strength and stability of economies. After the January 6 attack on the U.S. Capitol, we have seen companies pausing their political contributions, asking for money back from some lawmakers, and banning hate or violence-promoting groups from participating on platforms.
These actions are steps in the right direction, but they don’t go nearly far enough. What we witnessed this month was a low point for democracy and a long-overdue wake-up call for business leaders. It’s time to reset the private sector’s relationship with U.S. politics and move forward in a way that ensures the government runs on the will of the people not the power of the dollar.
After a tumultuous summer of protests against racial injustice, the American public was already calling for shifts in corporate behavior. Now, they seem even more keen for business leaders to take a stand where elected officials fall short. According to a recent survey from Just Capital, 54% of people (both Republican and Democrat) now trust CEOs over politicians to take action to protect and uphold democracy.
But for leaders to earn the right to this trust, they must first recalibrate their own moral compasses. During the Trump administration, many CEOs chose to look the other way as the president stoked the flames of white supremacy and racism, spewed misinformation that cost hundreds of thousands of lives in a deadly pandemic, and continued to deny the existence of our climate crisis. They chose tax breaks and a booming stock market over ethical leadership. Make no mistake: This silence — in the face of repeated assaults on common decency, respect and rule of law — helped to create an atmosphere that allowed the recent insurrection to occur.
Now, when the threat to a stable operating environment for business is clear, some are finally speaking out. We could write that off as too little, too late. Instead, however, we must harness corporate leaders’ feelings of outrage — and the shame some might feel at their complicity. We must use the momentum we have now to drive meaningful change.
Reactive and piecemeal solutions won’t cut it. We need to fundamentally rethink the way businesses operate in Washington. That means dissolving corporate PACs, ending trade association and corporate lobbying, and advocating for legislative reform that will reverse Citizens United.
Dissolve corporate PACs. Companies need to take the lead on separating policy from politics. One way to do so is by not just pausing political giving (and then resuming it when people stop paying attention) but committing now to end campaign contributions and dissolve corporate PACs, which can be used to obscure the extent of influence peddling.
A handful of companies like IBM took this ambitious stance from the outset — never forming a PAC nor spending a dime on political donations. More than 50 years ago, then-CEO Thomas Watson Jr. stressed that a company “should not try to function as a political organization in any way,” and this thinking has not come at the expense of the company’s influence in Washington. As a big player in U.S. industry, IBM is still given a seat at the table and able to advocate for policies that benefit its workers, communities, and other stakeholders. Charles Schwab announced a similar policy this week, but we need a critical mass to join them.
Once CEOs have led by example and put an end to all political contributions by their own companies, they can use their voices to encourage others to follow suit. During my tenure at Unilever, we did just that with a campaign by Ben & Jerry’s, one of our brands, to stamp money out of politics.
End trade association and corporate lobbying. Another way that corporations use their cash to take politics out of the hands of the people is through corporate lobbyists and trade associations. For instance, the major tech firms that moved in the last week to ban violent and extremist groups from their platforms also spent a record amount on lobbying in 2020, in part to resist regulation and defend practices that proved to be harmful to our democracy.
Consider, too, climate change deniers, who may have moved away from directly funding candidates or campaigns but have weaseled their way into trade associations to assert their influence. Companies must call on these associations to be transparent about their climate policy stances and break ties when there’s misalignment. Organizations like The B Team, which I chair, are providing the tools they need to do this.
Just last week, the French energy company Total became the first major oil producer to withdraw from the American Petroleum Institute (API). Total made the decision because its commitment to fighting climate change was completely out of step with the API’s. This move further raises the bar for other companies. The public is watching. Trust is on the line.
Citizens United and legislative reform. Finally, CEOs need to push for a reversal of the Supreme Court’s Citizens United decision, which held that unlimited spending by corporations and other outside groups on elections was protected as free speech.
The ruling has, frankly, brought the U.S. political system to the point of legalized corruption. In other countries, some businesses offer bribes to escape persecution from already enacted laws. In the United States, bribery happens before the laws themselves are passed — legally. Citizens United reinforced the notion that America’s democracy serves the interests of those who can afford to buy authority. Political spending in the 2020 election cycle alone was $14 billion, making it the most expensive in U.S. history.
Without a constitutional amendment to overturn Citizens United, this could remain the status quo. The private sector must recognize that its long-term license to operate in a stable democracy depends on supporting lawmakers who stand ready to challenge the status quo, not just reduce tax and regulation.
Our current model of democracy rests on moral authority, formal authority, and bought authority. We cannot let bought authority continue to overrule all else. It is time for CEOs to step up as moral leaders. This will require acting with transparency, integrity and a view to lasting impact — not short-term revenue, profit, or share-price gains. This is what it will take to help save our democracy.