The Occupy Wall Street protests have given voice to a sense of unfairness that is widely shared, according to public opinion polls. There is a conviction that the deck is stacked in favor of the wealthy, corporations, and special interests - and against average citizens.
Many Americans believe that when major financial institutions take inappropriate risks, they receive taxpayer-funded government bailouts and no one goes to jail. Soon, the bankers are back to business as usual with huge profits and bonuses, while the middle class suffers high unemployment and massive foreclosures. For the haves - the "1%" in the vernacular of the Occupy Wall Street protestors - it's heads I win, tails you lose.
It's partly a crisis of trust in an ineffective government seen as failing to write and enforce appropriate rules. But it's also a lack of trust in greedy corporations that are seen as job exporters and excessive profit-makers.
Walking in Zuccotti Park recently, as David Crosby and Graham Nash sang Teach Your Children in the background, I spoke with a protester holding a sign that read, in part: "Business: BE HUMAN - Treat your customers and workers with fairness."
That doesn't seem too much to ask, does it? In fact, this protester - a defense lawyer in a pinstripe suit - omitted one-third of the informal social contract between business and the public that emerged from a century of debate about the responsibility of business, according to a report on public trust in business from the Arthur W. Page Society and the Business Roundtable Institute for Corporate Ethics. The informal social contract includes: "Producing and marketing quality products and services at reasonable prices, providing steady employment in a healthy and safe environment, and sup- porting community institutions."
To be sure, many, if not most businesses largely do adhere to this informal social contract. However, there are too many examples of selfish, ruthless, insensitive, and even criminal conduct by people in business.
Moreover, the minimum standard articulated in the informal social contract no longer is sufficient. The Page Society's Authentic Enterprise report argues that with the advent of globalism, the digital revolution, and the rise of myriad influential new stakeholders armed with information and expertise and fueled by social media, institutions of all sorts are being held to a higher standard. And rightly so.
The appropriate response of business to this trust crisis is, simply enough, to deserve trust. And that means more than delivering on the three pillars of the informal social contract. It means aligning the business purpose with the public interest in a meaningful way and consistently adhering to a set of values that include a commitment to ethical conduct and creation of social value.
Of course, being a values-based, socially responsible business is not enough to earn trust. Relationships of trust must be built with all stakeholders through a PR effort that includes strong two-way dialogue and a willingness to understand and respond to others' needs. This is particularly difficult in this era of cynicism and distrust, and thus requires a tireless, enterprise-wide commitment.
It has long been thought that in order to create social value, a business must forego profits, thus sacrificing its responsibility to shareholders. However, corporate management guru Michael Porter believes the concept of a tradeoff between profitability and social value is a false one, arguing that it's in business' self interest to make society better. Porter makes a case for "shared value," which "involves creating economic value in a way that also creates value for society by addressing its needs and challenges."
There's certainly some merit to Porter's stance, but there's also no doubt that in order to build long-term social value, sometimes companies might need to sacrifice short-term advantage. In so doing, they also build common ground with the public in a way that strengthens the enterprise for the long haul.
One needn't be camped out in Zuccotti Park to believe business can build public trust and improve the world by ensuring that its purpose is positively aligned with the public interest and that it adheres to an admirable set of core values. In fact, if more businesses did so, there might well be fewer campers.
Roger Bolton is president of the Arthur W. Page Society and former communications head at Aetna.