Companies and their directors have one directive: fulfill their business’ mission to the very best of their ability. Banks should strive to provide the most efficient banking services for their customers. Energy companies should produce the most reliable, most effective energy for consumers. Retailers should sell products that meet their customers’ needs and satisfaction.
No matter their line of work, businesses should provide jobs and make space for innovation. Publicly-traded businesses should utilize their strengths to create opportunity for long-term financial benefits for shareholders. Every business began to meet a need that only entrepreneurial innovators in a free market could swiftly, efficiently fill.
But after decades of political activists bullying American companies, the hens have finally come home to roost: corporate activism has led to waves of virtue signalling. Policy changes and business decisions to appease the squeakiest wheel of the day are increasingly common. Businesses, especially corporations, are now responding in force to pressures to act as the nation’s moral, social, environmental compass. We’ve seen it in boardroom decisions and dozens of woke CEO emails with their PR-approved response to the latest controversial event. Most eerily, we’ve also seen it through blatant censorship.
It might be against your “live and let live” nature to get involved in these political-corporate battles. But if we want a truly free enterprise system — a marketplace free of politics — it’s time to pressure companies to return to neutral and get back to business.
Pressuring for Neutral Businesses
Part of bringing business back to neutral is about focusing on those who haven’t left the center. Scott Shepard, Deputy Director of the Free Enterprise Project, urges Americans to “increase pressure on still-neutral organizations to stay in the middle of the road.” Still, he encourages “going all out – peaceably and without violation of any non-discriminatory laws, certainly – against companies that have moved” away from their core business directives.
Hearing the level-headed investor is the best way to ensure cooler heads prevail in annual meetings. Retail shareholders have a track record of staying out of annual shareholder meetings, and that was excusable a decade ago. But in this day and age, it’s time to show up. Shareholder proposals are one of the tools most utilized by political activists to force their priorities into boardroom decisions. As shareholders, it’s our responsibility to vote against proposals that are blatantly politicized or simply introduced to appease activists who have no financial skin in the game. Instead, we must vote for level-headed proposals that benefit the company’s long-term financial outlook.
We cannot expect to beat back the activist mob in the boardroom by doing nothing. Leaving businesses alone and letting them do as they please has been the strategy for the last decade: bad policies that have hurt shareholders have been the result. But we also don’t have to pressure companies to swing the pendulum too far. Calvin Coolige said, “The chief business of the American people is business.” We need to take a page from the woke mob’s tactics and pressure businesses to get back to their responsibility: be stewards of good business and policies that benefit shareholders. Leave the politics at the door.