Business Leaders and Political Spending: "Enough is Enough"
Elizabeth Doty, LinkedIn
Though business leaders have come to view these practices as normal -- the price of a "seat at the table" -- they are relatively new. According to professor David Vogel, until the 1970s, American firms did not engage in widespread political activity (at least, not since the 19th century). Most executives were reluctant to engage in the “messy” business of politics.
And, as we can now see, this new normal comes at a tremendous cost. As Leadership Now CEO, Daniella Ballou-Aares explained in the Financial Times last week, “Whatever one thinks about corporate investment in politics, I think few companies thought when they were writing their cheques that they were giving license for undermining democracy.” Yet both Pew Research and Public Agenda have found that a leading cause of American distrust and belief that the system is "rigged" -- across the political spectrum -- is the perception that politicians are "bought and sold" by corporate America. As Rebecca Henderson argues in Business Can't Take Democracy for Granted, this is terrible for business. Executives are left unable to plan in a world with amplified uncertainty. Shareholders file resolution after resolution, wanting to know how their money is being used politically. Employees are up in arms, outraged when their firms are part of destructive tactics. Customers shift purchases, or lose confidence and hold back on spending overall. And corporate capital is the fuel for this fire. As one CEO recently told me, "They are using our own money against us, to create constituencies who view us as an enemy."
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