Whatever you think of the annual meetings of the World Economic Forum, there are still few better settings than Davos for a CEO wanting to look like a statesman. You get the same alpine setting as Christine Lagarde or John Kerry, and the same sweeping subjects to comment on. (Reskilling! Reforestation! Responsible AI!)
Klaus Schwab’s creation may not have the influence that conspiracy theorists suspect, but it was instrumental in promoting the idea that unelected business leaders should have as much of a voice as elected officials in our greatest global debates.
Lately, however, the message from some politicians to budding business statesmen has been “get off my pasture.”
Leaders who come to Davos to announce their emissions reduction targets now find themselves lambasted by Tories who brand the net zero agenda a threat to energy security. Liberals criticize that the idea of self-interested capitalists leading on social issues does not seem to involve pay a lot of taxes.
This week’s meeting saw BlackRock chief Larry Fink bemoan partisan criticism that “demonizes” the asset manager’s sustainable investing policies. Republican states withdrawing their mandates had cost him about $4 billion in 2022, he estimated — an irritation for a company that added $230 billion in U.S. investment last year, but a figure that could increase.
Other business leaders fear a “wokelash” right-wing activists who accuse them of supporting liberal social causes. As regulators pursue “green laundering” by companies that have overstated their climate claims, executives are questioning whether “greening” — keeping quiet about their environmental efforts — is the wisest approach.
Away from the loud campaigns, however, the debate is shifting to whether business leaders have addressed too many polarizing issues on which they lack legitimacy. Academics, lawyers and consultants offer roadmaps on how to navigate an increasingly divided political environment with less risk of pushback.
The risks of “corporate entanglement” in politics are such that business leaders should “by default not get involved” on most political issues, one said. recent post from the BCG Henderson Institute think tank.
If they can’t avoid taking sides, they should explain the principles that guide their decisions and let employees or regulators control their actions, he said.
Leo Strine, the former chief justice of the Delaware Supreme Court, said voters left and right are asking, “Who are the CEOs to use other people’s money to advance their own idiosyncratic vision of good? ”
He urged companies to focus on policies supported by both left and right, such as paying a living wage, non-discriminatory hiring and preventing environmental harm. If a company must take a position on an external public policy, he wroteit must result from a deliberation of the board of directors and not from a whim of the managing director.
But the CEO’s activism Davos once celebrated has perhaps reached its peak: in its place, a more calculated approach to political engagement is taking shape, focusing on the areas most relevant to key corporate constituents, notably investors.
That won’t stop CEO-statesmen from seeking the Davos stage. But next year, they’ll likely come armed with a much clearer explanation of the business case for straying into territory politicians once claimed as their own.