The Trump administration’s decision to separate children from their parents at US borders has dominated headlines for days. As pressure from politicians and religious leaders climbs to meet the escalating acrimony, the business community’s muted response has been striking. Mark Zuckerberg and Sheryl Sandberg have disclosed their personal donations via a Facebook spokesperson, but have made it clear this is a decision based on personal values, not a corporate initiative. And Microsoft has noted opposition to the program, but in the context of its commercial relationship with ICE. Otherwise, silence prevails.
This is an interesting shift: Only last September, 400 business leaders, primarily from the tech sector, threw their combined voices behind an advocacy campaign to maintain the Obama-era DACA program that protected certain undocumented immigrants from deportation. Now, in less than a year, the business community appears to have thought better of its enthusiastic support for the human rights of America’s immigrants.
What is going on here? The images of crying children behind wire fences are arguably even more emotive and striking than the plight of the Dreamers, and this is clearly an issue the public cares deeply about. Given that the public has called on CEOs to take stances on social issues—and the consensus that it is appropriate for business to do so is increasing—should we have heard more from business leaders on this topic by now?
It would be premature to declare corporate activism over. But lemming-like enthusiasm has given way to reflection and reconsideration as companies mull the social and political consequences of their rhetoric. As a leader of a non-profit that works with businesses on their social responsibility, I have been speaking with companies about their decision to stay mum on this issue so far. They tell me they are grappling with three issues: relevance, agency, and remit.
Relevance: While the government’s decision to separate families may seem strikingly similar in nature and philosophy to its moves to undermine DACA, the implications for business are quite different. The proportion of DACA employees at companies such as Apple, Google, and Microsoft may have been tiny, but these companies plausibly argued that fighting cancelation of the DACA program was highly material to their employee interests—as well as to future hiring and retention plans. It is difficult to make the same case about the thousands of families detained at the border.
Similarly, Bank of America’s recent moves on gun control directly pertain to its customer base and investment philosophy, and moves to support the Paris Climate Agreement are generally agreed to serve the interests of global long-term business resilience. Whatever the personal views of business leaders on the moral dimension of a given issue, it is appropriate for business to engage only on directly relevant issues. Otherwise, there would be no conceptual limits to corporate activism.
Agency: There are issues on which companies can drive and shape new norms, where smart corporate approaches to responsibility can prefigure, shape, or sidestep the constraints of the policy environment. Indeed, the ability to anticipate and plan for societal shifts is core to the role of any effective business leader. Climate change is probably the best example: The business community has doubled down on its commitments to reduce greenhouse gas (GHG) emissions and build a renewable energy industry, rendering the Trump administration’s position against the Paris Agreement to some degree irrelevant amid wide shifts in public sentiment. Similarly, the corporate embrace of diversity and inclusion strategies has a strong business case and considerable momentum of its own; it is not thrown off course by tactical policy moves in Washington, D.C., to undermine the interests of women or LGBTQ communities.
But law and order, education, and health care are all areas in which business’s impact is heavily constrained by the policy and regulatory environment. In the absence of a supportive policy landscape, companies can go only so far and are generally unwilling to deploy scarce lobbying dollars on tangential or irrelevant issues. While the business case for immigration is strong (most companies want access to the most talented and capable workforce possible), the policy impact of the most recent moves is long-term and indirect at best. Corporate statements on child separation could correctly be dismissed as empty posturing.
Remit: So far, commentators have been relatively insoucient about the future of democracy in an era of corporate empowerment. But concerns about the role of business in the policy sphere are valid, and they are hitting home. Many multinationals amass revenue that is higher than the GDPs of medium-sized countries, and they can deploy considerable influence across geopolitical boundaries. In an era of looming trade wars, economic and political nationalism, and growing attacks on human rights by regimes that are authoritarian (or aspire to be), it is tempting for liberals to call on business to support what seem to be longstanding, fundamental values. But businesses are not elected by their customers. Their primary motivation is to drive shareholder value. We should welcome their reluctance to stray beyond their remit and their willingness to limit engagement to issues on which they can have efficacy and impact.
Concern about business ethics and integrity is higher than it has been for many years. Large investors and the public are aggressively challenging the dominant orthodoxy, which has been that any decision to maximize profits is, by definition, ethically neutral. Calls for business to demonstrate societal value are growing louder and more persistent. But there is reason that the focus on shareholder value and profit-maximization has proved so dominant for so long: It brings unparallelled strategic clarity. Given the scale of the challenges we face, it is not inappropriate to argue that business should have a purpose beyond profit, that it should behave with concern for society and the environment. But such demands serve up many more questions than answers as to how real businesses should be led, what priorities they should address, and what choices they should make. We are starting to see a conceptual corporate shift away from managing risk and toward measuring impact, away from the exclusive interest of shareholders and toward considering stakeholders in a business. But there is still a long way to go.
Alison Taylor is Managing Director at BSR and an Adjunct Professor at Fordham Law School.