Corporate political activism

Business Political Influence

We are familiar with how businesses can be shaped by their political environment, especially through legal regulations. But we should also appreciate how the direction of influence can go the other way around: businesses can exercise influence over their political environment. Businesses can do this through a variety of means, but the most notable and controversial involve the extraordinary concentration of capital and market power that large corporations often accrue. They can leverage this concentration of resources to help shape political outcomes.

Should they? If so, under what conditions? What are the proper limits on how corporations wield political influence?

Lobby and Contributions

Perhaps the most direct forms of corporate political activism (CPA) are lobbying and campaign contributions. Lobbying involves hiring individuals who attempt to persuade political officials to adopt policies in line with the corporation’s interests and values. It is important to be clear that, while corporations often hire lobbyists to work on behalf of their financial interests, they also sometimes lobby on behalf of their social and environmental commitments. Lobbying is an all-purpose tool, in this sense.

Similarly, campaign contributions—money and in-kind contributions to a political candidate’s campaign—are often used to support candidates that are presumed to favor political causes that promote the corporation’s financial interests (e.g., lower corporate tax rates). But they, too, can be used to serve additional corporate social and moral values. Moreover, when corporations contribute to candidates that conflict with their espoused social and moral values, they run the risk of publicized hypocrisy that alienates some of their stakeholders. This is what happened to Target when it was discovered to have donated to a Minnesota gubernatorial candidate with a history of anti-LGBTQ statements and positions (Montopoli, 2010).

The most obvious moral concerns raised by lobbying and campaign contributions concern corruption. Political officials who receive campaign contributions from corporations may feel beholden to the corporations’ interests, especially in political contexts such as the US, where the amount of money political candidates can raise plays an outsized role in their ability to gain and remain in office. And the voices of well-paid lobbyists may be much louder in the ears of political officials than the voices of everyday voters. While corporate interests are reasonably among the interests they consider in making political decisions, the disproportionate amount of money that corporations are able to spend on campaigns and lobbyists can distort the weight placed on corporate interests (Gilens & Page, 2014). What results is a system that no longer reliably represents the interests and concerns of citizens.

Political Norms and Regulation Compliance

A less direct form of CPA concerns how corporations decide to comply, or not, with existing political norms and regulations. Just like citizens can undermine the force of laws by consistently exploiting loopholes and/or narrowly complying with the letter of the law without at all supporting its spirit, so too can corporations undermine the laws that apply to them through minimal compliance. When done with an eye to changing wider social outcomes, this can constitute its own kind of political activism. Sometimes these actions can go as far as outright disobedience, on the assumption that enforcement will be weak or not costly enough to seriously damage the corporation.

Here, Target provides us with another case. When the US state of North Carolina passed a so-called “bathroom bill,” designed to deter transgender persons from using bathrooms that aligned with their gender identity, Target responded by announcing that its North Carolina stores would not comply (Abrams, 2016). This was a public form of disobedience that exposed the weakness of the law’s enforceability and reassured Target’s LGBTQ stakeholders while also attracting a great deal of public backlash.

Democratic concerns arise with this form of CPA, too. One concern is that if corporations unilaterally undermine laws with which they disagree, they can circumvent appropriate democratic processes. And if done frequently and with impunity, public respect for laws may erode. Another concern is that the risks of legal enforcement and social backlash that corporations take on when publicly disobeying laws are rarely worth whatever good they hope to accomplish in engaging in it.

Upholding Moral Standards

Finally, we should consider the positive role that CPA can play in upholding basic moral standards, such as those encoded in human rights. In places where there are notable gaps between what political institutions protect and provide and what basic moral standards require, corporations can play a role in filling those gaps. For instance, in places where state institutions do not yet encode adequate basic labor rights, through, e.g., reliably enforcing workplace safety standards, corporations can act on their own to ensure that their facilities are safe for workers (Palazzo & Scherrer, 2008).

While corporations may be helping fill important moral gaps in these cases, several democratic concerns arise once again. The most prominent concern is the accountability and transparency of their efforts. Democratic political institutions are made to be accountable to their citizens through electoral and representation mechanisms. Corporations typically do not involve such mechanisms, especially with respect to the wider political community that they might be impacting. And democratic political institutions are transparent to the citizenry, insofar as public deliberation precedes lawmaking and a free press reports on political happenings. Corporations tend to operate with much less openness.

These problems may be exaggerated, however. Even though corporations have not traditionally been structured to be accountable and transparent, and even though they cannot be as fully accountable and transparent as political institutions, perhaps they can be made accountable and transparent enough to play a legitimate role in helping uphold basic moral standards when state institutions fail to do so (Palazzo & Scherer, 2008). They can engage a wider range of stakeholders in their decision-making processes that are relevant to deciding how they fill the gaps, and they can disseminate information about how they go about doing so.

References

Gilens, M., & Page, B. I. (2014). Testing theories of American politics: Elites, interest groups, and average citizens. Perspectives on politics, 12(3), 564-581. https://www.doi.org/10.1017/S1537592714001595

Montopoli, B. (2010, July 28). Target boycott movement grows following donation to support “antigay” candidate. CBS News. https://www.cbsnews.com/news/target-boycott-movement-grows-following-donation-to-support-antigay-candidate/​​

Abrams, R. (2016, Apri 27). Target steps out in front of bathroom choice debate. New York Times. https://www.nytimes.com/2016/04/28/business/target-steps-out-in-front-of-bathroom-choice-debate.html

Palazzo, G., & Scherer, A. G. (2008). The future of global corporate citizenship: toward a new theory of the firm as a political actor. In G. Palazzo & A.G. Scherer (Eds.), Handbook of research on global corporate citizenship (pp. 571-590). Edward Elgar. https://doi.org/10.4337/9781848442924.00003