Filling the Void After an Abdication
In early February, Bruce Mehlman, of Mehlman Castagnetti Rosen & Thomas, a Washington communications firm,posted his quarterly slide deck. It is worth a look as my summary gives it less than its due. The theme was trust or rather the lack of it. Our government is underperforming and not getting away with it.
The Congress is by far the worst offender (my observation not Mehlman’s) likely because it is the only part of the government in which Democrats and Republicans need to get along if they are to do the jobs assigned to them by the Constitution and for which we pay them. It has essentially abdicated, and other institutions are moving to fill the void.
Surely, the Biden administration knew it already, but Mehlman reminded them that they had but two years before they were likely to lose tenuous control over the Congress. Proponents have a harder job than opponents and it gets worse when partisanship hits new highs. If the real goal of a politician is to get reelected (do you doubt it?), there is no incentive to compromise.
CEOs on the other hand prefer narrower and more predictable swings of the pendulum so they have stepped into the controversies and taken more visible positions, especially on the most outrageous political ideas. If you’d like to replace the words “political ideas” with “fund raising” or “attention getting” schemes, you won’t be far wrong.
Of five themes Mehlman thought could go either way, three started well
- Vaccines prevailed over mutations and fear;
- The relief recovery continued; and
- Investments in resilience seem likely.
Two are less favorable
- Confrontation with China continues; and
- Bipartisan compromise is losing badly to gridlock, blame and the permanent campaign.
Let’s split the credit evenly between government and the private sector for the things that are going well. Unfortunately for those who look to government for answers, we have to blame that side for the things that are going badly.
At the three-month mark (true, far too early to draw meaningful conclusions,) the private sector is contributing while government is detracting.
Today, less than three months later, Mehlman has posted a new deck. He calls it “Woke Capitalism” and its Discontents: Navigating Hyper-Activism in an Age of Disruption. Thanks to technological, cultural and political trends resulting in social disruption, citizen engagement and leadership failure, business has emerged as the most trusted institution to lead on a wide range of societal issues.
Such business involvement is not new. Nor is it just about sucking up to politicians. Contributions are a cheaper and less controversial way to achieve that goal (at least in the minds of the politicians).
- 68% of Americans think CEOs should take a stand on social issues
- 54% of employees think CEOs should speak publicly on controversial political and social issues
- 43% of consumers will favor the company that takes a stand on like-minded (that’s the tricky part) social, environmental, or political issues
- About 25% of investments (up from 1% in 2014) went to ESG (environmental, social, governance) funds.
Would these be the results if Congress were doing its job?
On the left, Progressives grapple for power with moderates, while on the right, Populists do the same with traditional Republicans. In the battles that matter to elected officials – reelection and money raising – the Progressives and Populists seem to be prevailing. Since those are not the issues that matter to the business community, it is not wholly surprising that it is not well-aligned with either party.
Leadership and solutions face an uphill fight in a media environment in which narratives are more important than facts, speed is more important than accuracy and outcomes are more important than objectivity.
Yet leadership and solutions are needed and those are not prioritized by members of Congress. Like it or not the void is being filled, at least in part, by the business community.
In such a tricky environment, what is the CEO to do? Mehlman prefers to suggest best practices because he believes there is no formula. Here are his guidelines. The explanations in his concluding slide are additive.
- Be true to your word and values.
- Resist reflexively rushing in.
- Build a diverse team and a consistent process.
- Find safety in numbers and wisdom in crowds.
- Inoculate in advance through meaningful stakeholder engagement.
- Ensure employees are heard.
Engaging in social and political issues is not the traditional remit of corporate leaders, but what are they to do if members of Congress show little interest in finding answers that satisfy perceived needs?
Trust in government is near non-existent and, according to Mehlman, this is our greatest problem. Is it any surprise, that two non-elected bodies – the Supreme Court and the Federal Reserve Board – are making some of our most important decisions?
Now we seem to be adding a third unelected influencer: the business community.
That does not say much for democracy, but maybe that is to be expected when elected officials abdicate their responsibilities.