Advisory Partners

The FT Moral Money Forum is supported by its advisory partners, High Meadows Institute and White & Case. They help to fund the reports.

The partners share their business perspective on the forum advisory board. They discuss topics that the forum should cover but the final decision rests with the editorial director. The reports are written by a Financial Times journalist and are editorially independent.

Our partners feature in the following pages. Each profiles their business and offers a view on corporate political responsibility. Partners’ views stand alone. They are separate from each other, the FT and the FT Moral Money Forum.

Corporate Activism and Moral Leadership
Chris Pinney, president and CEO, High Meadows Institute

The saying “with great power comes great responsibility” sits well with the moral and political challenges that business leaders face today.

Large companies are among our most successful international institutions. More than half of the top 100 economies by revenue are global corporate and financial firms whose impact, reach and resources exceed that of some nations.

It is hardly surprising, then, that society looks to business to take a greater lead as well as more responsibility.

Sixty-eight per cent of respondents in the 2021 Edelman Trust Barometer global survey believed that chief executives should step in when a government does not fix social problems. Sixty-five per cent said that CEOs should be accountable to the public, not just to directors and stockholders.

As explored in this report, trying to meet these expectations takes us beyond ESG to questions over the role that business already fills in the governance of society – and the part it needs to play.

Encouragingly a lot of chief executives have stepped up. They are speaking out on social issues including voting rights, climate change and gender and racial equality.

We have also seen more organisations, ranging from the World Economic Forum to the Business Roundtable, publicly commit to sustainability and stakeholder capitalism. This is a scenario that was unthinkable a decade ago.

While such activism is an important step towards redefining the role of business leadership, the challenges are still significant. Chief among them is the reform of corporate lobbying and tax management practices.

A recent article in The New York Times pointed out that although Marc Benioff of Salesforce, is a respected CEO activist on social justice issues, his company avoided paying US federal taxes in 2020, despite its $2.6 billion profit.

While Mr Benioff is not responsible for current tax rules, support from him and his activist colleagues – and their industry associations – will be critical in making taxation more equitable. We also need their help to develop regulations that create a level playing field for business while protecting the public interest.

In the year ahead, we can expect to see increased scrutiny on these kinds of issues as investors and stakeholders focus not simply on ESG but on business’s larger role in shaping the “rules of the game”.

In our recent studies, Beyond ESG: The Role of Business in Collaborative Governance and 21st Century Business Leadership and the Rise of Corporate Activism, you can find further insights into the challenges and opportunities of this new role for business in 21st-century governance.

* High Meadows Institute’ views are separate from other advisory partners, the FT and the FT Moral Money Forum

White & Case ESG Group

Today the public expects to see greater corporate political responsibility on issues including climate change, sustainability, supply chains and gender and diversity. Staff, suppliers, customers and now shareholders have put pressure on companies to express their positions publicly.

This focus on corporate political responsibility is an indication of the move from shareholder primacy to the stakeholder capital model, a theme we explored in an article last year.

The call for public statements has to be balanced against:

• compliance with a company’s current internal policies on, for example, political engagement, and

• the alignment of such policies with existing strategy, as well as guiding principles on investment.

As a first step, it is important for all policies, whether at the parent company or a subsidiary, to have input from every department likely to be affected by an issue, whether this is sustainability, ESG, human rights or something else. All policies need to be clearly drafted. They must also ensure consistency by taking into account a company’s global practices and commitments.

In addition to operational policies, companies would benefit from putting in place specific guidelines on corporate political engagement. These should take into account scope, influencing factors and relevance, and should be flexible enough to allow for different national laws and restrictions. As a minimum, such policies require executive input and approval at a global level. Shareholders and affected local subsidiaries may be consulted.

As a second step, companies need to ensure that their teams – in particular those that address sustainability, ESG and human rights – are integrated with other practices.

In addition to meeting legal obligations and disclosure requirements (listed entities, for example), it is crucial that initiatives work with investing practices at all levels. This can be done in several ways, including ensuring that ESG and human rights teams report directly to the board, requiring those teams to have regular input into investing criteria, and the periodic mapping of internal policies to ensure consistency.

A principle of the UK Corporate Governance Code is that the board should establish a company’s purpose, values and strategy, and satisfy itself that these align with its culture. Many governance codes elsewhere have similar principles.

When a company responds to a topical political issue, it can put its purpose and values at risk, and this may affect its brand. Given that purpose and values are fundamental to a business, it is vital that these align with policies on corporate political responsibility.

Any company that decides to embrace corporate political responsibility will also need to enhance its oversight of external communications. Companies must mitigate risk and protect their brands in ways they have not considered before.

* White & Case’s views are separate from other advisory partners, the FT and the FT Moral Money Forum