POST-PUTIN, IS PROFIT (still) THE PURPOSE?

Reflections, September 2023, Torsten Hvidt

WHEN THE SOUL TAKES RESIDENCE IN THE FETA CHEESE

Back when I was an undergrad at University, one of my (best) professors distributed a column by a famous artist - entitled "When the soul takes residence in the feta cheese". The context was an atrocity by a regime in the Middle East, which led to a lot of threats and theatrics but spectacularly little action in the West - after all, we had export interests to protect, not least the thousands of tons of feta cheese we sold to the country in question.

The businesses back then hid under Nobel Prize winner Milton Friedman's credo "the purpose of a business is to maximize profits for it's shareholders". That statement and also the long forgotten feta episode might ring familiar to many leaders despite the time gone by.

I was featured in the leading Danish business newspaper, B?rsen , a couple of weeks ago, discussing Friedman, the purpose of companies and the authenticity and viability of our so-called corporate values. Since then I've been invited for quite a few discussions with boards and exec. teams on this vital topic and have found that the first central question is whether we need to be clearer on 1) our deeply held values, 2) corresponding issues where we want to actively lead and 3) goals we want to achieve, resources we are willing to commit and not least risks we are willing to incur. So far my answer is that many companies would benefit from more clarity.

PUTIN AND PURPOSE

In order not to let my speaking partners off too easily, I've tried not to let the discussion revolve around the impressive corporate response to Putin's aggression in Ukraine. It's too easy (although a few companies still haven't deciphered the memo). Business leaders should not be praised or expect ceremonies for reacting when European security and the wider international order is plunged into chaos, violence and humanitarian disaster. When basic human values such as safety, freedom, democracy and the rule of law are under attack, a reaction must be expected. These are, after all, values that we have thrived under for decades, both as citizens, businesses and societies. Perhaps for so long and to a degree where they have been taken for granted.

Consequently, over these last weeks my discussions have not touched on whether businesses leaders have an obvious interest in upholding and defending the international order on which their businesses rely. The discussion arises when we contemplate whether businesses have a moral duty to uphold the values on which that order is built, at home and abroad? This is the second central question at a time where we have become slightly numb to the rise of authoritarianism within and just outside of our borders... not to mention the geographies reached by our supply chains.

APARTHEID: A CASE IN POINT

But if Ukraine isn't the prism for a discussion, what is? Well, there is a worthwhile lesson for business and political leaders inside the story of the anti-Apartheid movement of the late 20th century. Here, in the middle of Friedman's raging laissez-faire capitalism, we saw classic capitalistic US businesses, across a variety of industries, band together to counter the white nationalist regime in South Africa.

The story: when the comprehensive Anti-Apartheid Act of 1986 was presented to President Ronald Reagan, by the US Senate and House of Representatives, he responded by using his veto power against it. Reagan justified this by saying "Punitive sanctions, I believe, are not the best course of action; they hurt the very people they are intended to help". At the time Nelson Mandela was still convict #46664, at the maximum security prison on Robben Island, so Archbishop Desmond Tutu was the moral voice of the oppressed black population - and he made that voice heard in no uncertain terms when he answered the US President:

"He [Reagan] gives the ritual verbal condemnation of apartheid and expresses his abhorrence of it, but the man [...] refuses steadfast to take any effective action against one of the most vicious policies the world has known. Apartheid will be dismantled and its victims will remember those who helped to destroy this evil. And President Reagan will be judged harshly by history".

- Desmond Tutu, New York Times, September 28, 1986

Following this, the Republican controlled Senate overrode the presidential veto and thus turned the sanctions into law. And they did this with massive corporate support; companies such as GM and IBM led a coalition of 200 major US companies that left South Africa, despite considerable economic interest in the country. Many of these 200 companies were led by figures who were not exactly known to be progressive, but these leaders still found a reason to take guidance from something or someone else than Friedman. Their souls did not reside in whatever commodity they were buying or selling. And ultimately their decision was recognized as a vital part of bringing an end to the atrocities in South Africa.

Reagan's moment of infamy should give pause to leaders who entertain more or less fanciful justifications for support of regimes that are working to dismantle the order their own businesses rely on. It is seldom that we are in a position to make critical calls on behalf of people in other cultures and circumstances. Certainly Reagan was not positioned to make a critical call on behalf of the oppressed South African population. Only Desmond Tutu was.

DESMOND OR MILTON FIGHTING FOR THE DRIVERS SEAT

And that's the third and final central question: when we don't know the culture, the circumstances and what's needed, do we then identify, listen to and take guidance from a moral voice? Or do we keep Friedman in the driver's seat, still? I am not advocating for any version of cultural/political imperialism, only that we remember our own history, our own roots, our own bonds of fellowship, our own values and the sacrifices made for us... by our own forebears... and right now, by the Ukrainian Armed Forces.

In a polemic way the question is no longer whether the West helped save Ukraine, but rather whether Ukraine helped save the West, by prompting a tectonic shift in the way we make decisions:

Bravado and feigned outrage rarely accomplishes anything. Neither does the now na?ve notion of the win-win solution. When the international community didn't react to Putin's illegal annexation of Crimea with anything but duly choked gestures, he was emboldened to try for more. The parallel to the Nazi regime and the British/French policy of appeasement should be more than obvious. Hitler started with the Sudetenland, and when he was only met with theatrics, he took the rest of Czechoslovakia.

We must face what my friend Morten Alb?k has pointed out time and time again; "It is as meaningless not to make money, as it is only to make money". And with that, let me say that there are very difficult choices on the horizon for most international businesses. Because there is a price to pay for our values.

If there wasn't, they would, by definition, be worthless.

#purpose #values #ethics #culture

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The articles in B?rsen by Thomas Hvelplund Askj?r & team:

https://borsen.dk/nyheder/virksomheder/topraadgiver-topchefer-skal-vide-hvor-de-traekker-graensen

https://borsen.dk/nyheder/virksomheder/krig-koraner-og-kon-topchefer-tvinges-ud-i-dilemma-mellem-vaerdier-og-forretning