Thursday, 17 August 2017

Companies and Morality: A Prevailing Issue

Usually here in Financial Regulation Matters, the focus of posts is on the world of business and usually its connection with the world around it – business, rather obviously, is part of a much larger societal picture, particularly in this modern era. The focus of the posts is usually upon business and/or regulatory developments, which are then assessed against a broader backdrop. However, today’s post represents a slight departure from that approach in that it responds to the recent wave of headlines praising corporations for taking a stand against the developing situation in the United States regarding President Trump and his views towards outwardly racist groups. For this post there is only one question that is of concern, and that is whether the praise being showered upon companies like Apple, Spotify, and Go Daddy is correct.

The first wave of public, and specifically media praise for companies began after a number of CEO’s left the President’s advisory councils. Before the President officially disbanded the ‘Manufacturing Jobs Initiative’ and the ‘Strategic and Policy Forum’, he had suffered a number of high-profile losses in the form of Kenneth Frazier, the head of pharmaceutical giant Merck, and the CEOs of Under Armour and Intel. According to media reports, the actions of the members of the Strategic and Policy Forum, in informing the administration that the vast majority would be standing down, precipitated the closing of both initiatives. Whilst the President’s reaction of ‘grandstanders should not have gone on’ the initiatives anyway is to be expected, the negative reaction to his failure to repudiate the actions of far-right activists in Charlottesville at the weekend continued unabated, with JP Morgan Chief Jamie Dimon ‘strongly disagreeing’ with the President’s handling of the situation, Apple’s Tim Cook warning the President that ‘hate is a cancer’, and General Electric’s Jeff Immelt leaving the initiative because of the ‘ongoing tone of the discussion’.

Whilst corporate leaders abandoned the President, other corporations were taking action against the far-right. Earlier this week, Go Daddy, the website hosting company, announced that it had given The Daily Stormer, a neo-Nazi website, 24 hours to find another domain provider as a result of its articles concerning the murder of Heather Heyer. Spotify, the music subscription service, has started removing so-called ‘white power music’ from its databases. Facebook and Reddit have sought to ban hate groups, whilst the heads of Google, Apple, Facebook, Go Daddy, and a number of other corporations have pledged million-dollar donations to the Southern Poverty Law Centre (SPLC) and the Anti-defamation League. Spotify stated that ‘illegal content or material that favours hatred or incites violence against race, religion, sexuality or the like is not tolerated by us’, whilst Twitter and LinkedIn has removed accounts related to The Daily Stormer. There is an obvious question that must be asked, and regular followers of Financial Regulation Matters will likely know that what that is; what changed? The answer is perception, which is an all-important concept for corporations.

The despicable murder of Heather Heyer at the weekend has forced deep-rooted issues to the forefront of the public consciousness once more. However, if we take a step back and look at the situation, the situation is damning for corporations. Before the weekend, the content of The Daily Stormer was still illegal as it inspired hate and violence; yet it remained freely available via social media and the internet. The hate-filled songs on Spotify were still available. The leading corporations were not increasing their donations to the SPLC or the Anti-defamation League. Yet, the most damning realisation is that the viewpoints of the President, viewpoints that these business leaders were citing as the reason for their abandoning of him, were not new. Before the weekend, there were so many signs that Donald Trump held the views that he reiterated over the last week, but there was little disgust from business leaders then. There was no disgust when he filled the White House with people like Steve Bannon. The travel-ban on people from Muslim-majority countries caused angst, yet they did not abandon him. His repeated links to far-right and racist groups like the Ku Klux Klan has not deterred their support, whilst historic comments like ‘laziness is a trait in blacks’ have been forgotten about. The reason for this is simple, and calls into question any praise levelled at the actions of corporations. There has been some analysis in the media that looks at the economic effect of Trump’s relationship with these CEOs, and therein lies the problem; these corporations are not people. When they disregard the actions of Donald Trump who, throughout the course of his campaign made no secret of his ambition to sow division and hatred amongst the fabric of America, they do so to maintain influence within the political component of the State – as corporations, they must do this. As corporations, they must seek to look after themselves first before they consider any societal issues, so the theory goes, and that takes the form of lobbying for preferential treatment by way of reductions in tax or subsidies etc. Whilst some who are reading this may believe that this is acceptable, as is their right, we must remember that it is corporations who are preserving Trump’s power and, in reality, are the main reasons for his successes in the first place. Their retrospective disgust for hate and division needs to be contextualised properly, and that will start by considering the pro-corporate headlines of their removal of sites like The Daily Stormer – it should not take the murder of an innocent woman to push corporations to flush out such avenues of hate. It should not take the incredible footage that went all around the world of Nazi flags being paraded through an American city to prompt corporations to do what is right and publically disavow a President who does not disavow those flag carriers. Corporations have a lot to answer for, and stepping down from forums created by the President will not change that.

Keywords – Donald Trump, Corporations, Society, Morality, , Charlottesville, Corporate Culture, @finregmatters

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