Clearly, Corporations Struggle Being Beholden to Both Shareholders and Communities

The very notion of corporate social responsibility (CSR) was unthinkable a century ago when the relationship between companies and their workers was overwhelmingly tilted in favor of employers.

Then sweeping changes within U.S. labor law occurred over the years. Starting in the early 1900s, a slew of much needed employee-centric laws was passed. In 1935, the National Labor Relations Act (NLRA) was introduced, along with collective bargaining. Before passage of the Fair Labor Standards Act in 1938 (FLSA), as many as 1.75 million workers in the U.S. were between 10 and 15 years old and not attending school. Title VII of the Civil Rights Act became law in 1964. In 1970, the Occupational Safety and Health Act established safe standards in the workplace. And Title I of the Americans with Disabilities Act of 1990 prohibited discriminating against qualified individuals with disabilities.

Still, gradually, and then suddenly, the pandemic highlighted an imbalance in the relationship between employees and employers. The mass work exodus and ensuing “Great Resignation” as a result of quarantine resulted in businesses failing and employees gaining an element of power and negotiation not seen before. 

Workers have now leveraged their newfound worth to include better work/life balance, flex time, mental health days and time for volunteering — things unheard of in the Industrial Age. And, inspired by societal events that include mass shootings and racist attacks, the symbiotic relationship between employee and employer expanded to include what’s good for the community and society as well.

Now it matters more than ever that what the stakeholder holds as sacred is also of value to the business. When that is not the case, well …

Bob Chapek, CEO of the Walt Disney Company, is certainly the poster child for blunder in stakeholder relationships. He underestimated the implications of Florida’s Parental Rights in Education act—otherwise known as the “Don’t Say Gay Bill” — and it took a near employee revolt for him to get the message.

But Ron DeSantis — Governor of Florida, not technically a CEO, but close enough — deserves to have a book written on “How To Alienate Dang Near Everyone In Your Sphere:” workers, business leaders, constituents, and probably small children who love Mickey Mouse. 

Tunneling through with his own narrow, ultra-conservative political agenda, and on the heels of having introduced legislation criminalizing abortion after 15 weeks and having launched a ban on math books deemed to have questionable social content, DeSantis’ Parental Rights in Education act went too far. Or maybe he didn’t bother to test the waters ahead of introducing the bill. 

And so, DeSantis shares some blame for the upheaval taking place at Disney. He multiplied this mistake exponentially when he revoked Disney’s special district tax status, failing, again, to consider that Floridians might object to the largest employer in the state being manhandled. Now he is being sued by his constituents for the actions he’s taken against Disney. 

So far, DeSantis has the look of a leader who doesn’t know the value of his stakeholders in the form of business relationships, employees, community organizers or constituents.

On the other hand, there’s a question as to whether or not businesses have yet to fully embrace the CSR concept at all or are still looking for shortcuts. 

For example, in response to Texas Senate Bill 8, Governor Gregg Abbott’s ban on abortion after the detection of fetal cardiac activity, which normally occurs after about six weeks of pregnancy, mega-corporations such as Tesla, Apple and Citigroup joined the growing list of others who will pay travel expenses for employees seeking an abortion who cannot access these services nearby due to legislation.

Last fall, Salesforce offered to relocate employees and their entire families away from Texas altogether.

But before we grant any “Golden CSR” award to any of these, imagine establishing a relationship that means you seek an abortion through your employer. What must you disclose as you complete that paperwork? And it should be noted that this option is of no benefit for women who are not employees of these companies. This is watered-down CSR at best. 

And do corporations really care about the sensitivities of their employees if a big enough payday looms? Twitter employees would say that accepting an offer from Elon Musk to buy the company for $43 billion means “no.” 

“Turmoil” would describe the atmosphere around Twitter, with a real concern for attrition and difficulty in hiring. Recent news from Elon Musk that he would reverse the platform’s ban on Donald Trump only compounded the concern that employees have for maintaining discretion over content.

Ultimately, CSR will likely look different for different companies. Some corporations will continue their focus on earnings and employees and let society figure itself out. This may be all that some workers require or expect. 

No matter the nuances, the hope is that the common thread includes authenticity and integrity. 

Image credit: Ernie Journeys via Unsplash