I’ve been thinking about this for quite some time – but didn’t have a title for my musings. I recently heard the terms “main street capitalism” and “citizen capitalism” – which coalesced my thought processes and started my little grey cells firing….. It was like the proverbial light-bulb going on, and the more I researched the terms the more I thought “Now THAT’S what I’m talking about!
I can’t go on and on about economics because at some point, I will get confused between GDP, GNP, QRSTUV , PDQ, ASAP….. 😉 and lose myself in the deep dark forest (and I always forget the breadcrumbs) So I’m gonna cut straight to the chase here.
John Spinnato, Vice President, North America Corporate Social Responsibility, Sanofi US perhaps says it best in this article when he discusses the differences from a business standpoint between ethical and moral – and coming to the conclusion that the moral model is the correct standard that businesses should adhere to; as opposed to being merely ‘in compliance”. I could not agree more. Big Business too often views “ethical” as being in compliance, whereas I submit that They should see ethical as equating to moral. Just because a business or corporation can do something (being compliant with the law) does not mean that they should do it (when to do so does not benefit the company and all its employees in a fairly immediate and tangible way) Our mothers have raised us to treat others with decency, respect and compassion. Our churches tell us to treat others as we would like to be treated. It is fair and reasonable then to expect that personal standard of behavior to carry over into business dealings. Yet all too often it does not. Capitalism unrestricted, just leads to the greatest portion of the wealth residing with the fewest people – who have no inclination to spend it in a manner that “trickles down” to the rest of us. Greed, Mr. Gekko, is not working. Greed is not good. Greed, Mr G, is getting this country into very, very hot water.
I believe in the value of hard work as a means to success. Certainly, no matter what profession you choose you cannot be well regarded within it if you do not work hard at it. Hard work deserves reward, no question about it. But how much?? And, how much is too much?? . A typical performance based or incentive bonus is 5% or less of someone’s base annual salary. Who is going to tell me with a straight face that a 17 million dollar bonus given to a banking executive is 5% or less of his or her annual salary? Bueller?… Bueller?…. Oh, Its a percentage alright – like a billion percent OVER his/her base salary. Further – this obscene misuse of company funds is perfectly legal. (ie ethical in the legally compliant sense) Qui Bono? Only one individual, not all of the employees – who certainly all contributed to the company’s success during that period. So in a morally ethical corporate world how should this be handled?
1. In a profitable year, increase the base salary of ALL employees and cap bonuses at 5% of the base salaries., whatever they are, no exceptions.
2. Severance pay should be determined the same as it is in smaller businesses. You get your unused time in a lump sum when you leave, period.
3. Funnel profits into the company infrastructure, improve the work environments with a sharp focus on safety and cleanliness.
4. Increase other employee benefits such as health insurance, on site child care, short term disability insurance, etc with corporate paying 70% of the cost and the employees 30%. Have an account that all employees and the company can contribute to that allows all employees to draw funds from in the event of FMLA or other emergencies or illnesses that would prevent the employee from working for a period of time.
5. Have corporate invest in their employees by matching contributions to 401K’s. (or even dare I say – doubling them?)
6. Incentives for good works, grass roots volunteerism (recognition of those employees who actively participate in bettering their communities) Visible and dynamic corporate sponsorship of a vetted charity or charities, and visible, dynamic corporate “giving back” to the community.
A company that can afford to give ONE executive a 17 million dollar bonus should, if acting in a morally ethical manner, have only given that executive say $500,000 and used the rest to increase benefits to all the rest of the employees, and some to the surrounding community in the form of charitable sponsorship or giving. Its been proven time and again that the more an employee feels valued on the job (and that doesn’t just mean the size of the paycheck) the harder they will work for that company, and the longer they will stay with that company. Win/Win in terms of decreasing turnover, improving job satisfaction at all levels, decreasing use of sick time or unpaid time off etc etc.
Those are just a few thoughts on how corporations can take care of their employees and earn their trust and commitment – beyond the reward of the paycheck. Howard Schultz, CEO of Starbucks, has made a strong commitment to treating his customers, employees and product growers fairly, as you can read in this article – with the result that his company is flourishing lately. “The value of your company is driven by your company’s values.”
If more companies begin to act in the moral sense of ethical then the benefits do trickle down – not only fiscally but socially and psychologically. The employees will feel better about the company, morale will improve, production will increase and everybody goes home happier. And, not only the employees but the public at large – who can visibly see the corporation acting in a moral, respectful, and humanistic fashion. Again, Qui Bono? Everyone. Is Socially Responsible Capitalism possible in the Me Generation Era? Yes, I truly think so. Some companies are already doing it. Starbucks and Costco to name two. Will Main Street Capitalism actually become more Mainstream? Is it likely? Hard to say.
In some respects corporate leadership in general have to get over themselves and understand that they work for the company, not the other way around. That everybody wins when all members are respected, supported and challenged to perform their work well. The Wall Street animals (bulls and bears) would have us believing that the individual performance of top level management is the key to a corporation or company’s success. The self entitled me generation runs rabid with this mindset and it permeates the current thinking on Wall Street. I’m not sure how to change that thinking, or if it can be changed quickly enough to save us. That’s pretty scary. Can it happen on Wall Street? Will it happen on Wall Street? Good questions…. what do you think?
- Buy Like Buffett: Socially Responsible Investing in Ethical Business So You Can Sleep at Night (savings.com)
- Don’t Confuse Philanthropy with CSR When Debating the Social Responsibility of Business (triplepundit.com)
- The Social Responsibility of Business is Here to Stay (triplepundit.com)
- Benefit Corporations: A new capitalism ? (theglobalheroes.com)
- Employee Morale Boosters – Simple Things Make All the Difference (amsterdamprinting.com)