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Nature abhors a vacuum and therefore, to a certain extent, does business. A recurring refrain of capitalist reform that has seen multinationals become environmental and social policy activists is that corporations fill a void left by withdrawn, suspicious or inefficient governments.

Nowhere is this more visible than in the United States, where business leaders have long lamented a second-rate public education system, expensive and uneven health care delivery, and Washington’s failure to fix anything from archaic infrastructure to racial injustices.

Corporate America’s recent conversion to stakeholder capitalism, in which groups like the Business Roundtable have professed a commitment to treating employees, communities, and the environment as equals to their investors, has redefined the companies’ understanding of theirs. social responsibilities. It coincided with a darkening of the political backdrop, at least in the eyes of most senior executives.

So when the Trump administration withdrew from the Paris climate agreement, for example, companies stepped up their promises of “net zero” emissions to meet its targets. While Republicans failed to improve the Obama-era Affordable Care Act, Amazon, Berkshire Hathaway and JPMorgan Chase sought, ultimately unsuccessfully, to find their own way to make prescriptions cheaper.

As the education debate in Washington turned to brawls over side events such as critical race theory, “requalification” became the buzzword for employers who took it upon themselves to provide. training that their employees did not learn in school or college. But as Joe Biden defines an expanded role for government, that image is changing.

Business groups welcome some of the measures the president has taken, such as his executive decree accelerating a transition to the electric vehicle that automakers are already supporting. But they greeted with instinctive alarm his harsher antitrust rhetoric and his expectation that corporate taxes should fund infrastructure spending.

They are missing a more important point. Too often, their behavior perpetuates the dysfunction they denounce. There is now, as Michael Porter, a professor at Harvard Business School says, an urgent need for companies to completely change their approach to engaging with government.

Money spent on lobbying and campaign contributions has advanced narrow, short-term corporate interests. But he has also engaged in a form of politics that rewards partisanship, fails to address the country’s biggest political challenges, and leaves the cost to businesses to fill the void.

“Everywhere you look, businesses are helping and pushing for a system right now that has taken away all social support systems,” Porter said. As more and more boards of directors pursue social missions well beyond Milton Friedman’s definition of profit maximization, he asserts, “Businesses must support a serious long-term plan to build. a functional and efficient political system ”.

Too many business leaders have abandoned politicians or, worse, cynically bought them for short-term transactional benefits. Think tanks such as the High Meadows Institute say too few have grasped the potential mutual gain of working with politicians to improve governance and address the nation’s systemic challenges.

Whether voters believe that wealthy, unelected executives are the right people to take on this task is another question. Porter’s article ignores the suspicions many Americans have about the nation’s largest employers.

According to Gallup, only 18% have great confidence in large companies, up from 23% in the past two years. Many on the left see corporate lobbying and political spending as synonymous with corruption. Many on the right agree with Mitch McConnell, the Republican minority leader in the Senate, who complains that big business is acting like a “woken parallel government.”

But the business case for shaking up the relationship seems compelling. As many leaders said after the January attack on the United States Capitol, democratic stability is essential for economic stability. Those who funded Republicans who contested the electoral votes counted that day found that a closer look at the checkbook approach to government relations increases reputational risks for businesses.

Corporate revulsion at the events of January 6 and Republicans’ efforts to restrict voting rights in states from Georgia to Texas have opened a debate about what it really means for businesses to support democracy. This creates an opportunity for a late reassessment.

Prescribing a cure is more difficult than diagnosing the disease. Porter recommends that boards of directors make their political spending more transparent, align them with their commitments on climate change and racial equity, and hold politicians accountable for results. At a minimum, he says, companies should not hold accountable those who seek to undermine democracy.

Businesses shouldn’t expect this new model of influencing politicians to attract less skeptical public scrutiny. Nor will it eliminate the inherent conflicts between the roles of business and government. But as more companies conclude that their role in society goes beyond sending dividend checks, more companies will understand that a productive relationship with a healthy public sector would maximize their social impact.

As corporations are the main funder of the American political system, it’s time to ask harder questions about the return on investment they are getting.

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