Boeing recently fired CEO Dennis Muilenburg in order
“to restore confidence in the Company moving forward as it works to repair
relationships with regulators, customers, and all other stakeholders.”
Restore confidence? Muilenburg’s successor will be David
Calhoun who, as a long-standing member of Boeing’s board of directors, allowed
Muilenburg to remain CEO for more than a year after the first 737 Max crash and
after internal studies found that the jetliner posed an unacceptable risk of
accident. It caused the deaths of 346 people.
Muilenburg raked in $30 million in 2018. He could walk away
from Boeing with another $60 million.
Last August, the Business Roundtable—an association of CEOs
of America’s biggest corporations, of which Muilenburg is a director—announced
with great fanfare a “fundamental commitment to all of our
stakeholders” (emphasis in the original) and not just their shareholders.
Rubbish. Corporate social responsibility is a sham.
Another Business Roundtable director is Mary Barra, CEO of
General Motors. Just weeks after making the Roundtable commitment, and despite
GM’s hefty profits and large tax breaks, Barra rejected workers’ demands that
GM raise their wages and stop outsourcing their jobs. Earlier in the year, GM
shut its giant assembly plant in Lordstown, Ohio.
Some 50,000 GM workers then staged the longest auto strike
in 50 years. They won a few wage gains but didn’t save any jobs. Meanwhile,
GM’s stock has performed so well that Barra earned $22 million last year.
Another prominent Business Roundtable CEO who made the
commitment to all his stakeholders is AT&T’s Randall Stephenson, who
promised to invest in the company’s broadband network and create at least 7,000 new jobs with the billions the
company received from the Trump tax cut.
Let’s not forget Jeff Bezos, CEO of Amazon and its Whole
Foods subsidiary. Just weeks after Bezos made the Business Roundtable
commitment to all his stakeholders, Whole Foods announced it would be cutting
medical benefits for its entire part-time workforce.
The annual saving to Amazon from this cost-cutting move is
roughly what Bezos—whose net worth is $110 billion—makes in two hours. (Bezos’
nearly completed D.C. mansion will have two elevators, 25 bathrooms, 11 bedrooms
and a movie theater.)
GE CEO Larry Culp is also a member of the Business
Roundtable. Two months after he made the commitment to all his stakeholders,
General Electric froze the pensions of 20,000 workers in order to cut costs.
Culp raked in $15 million last year.
The list goes on. Just in time for the holidays, U.S. Steel
announced 1,545 layoffs at two plants in Michigan. Last year, five U.S. Steel
executives received an average compensation package of $4.8 million, a 53
percent increase over 2017.
Instead of a holiday bonus this year, Walmart offered its
employees a 15 percent store discount. Oh, and did I say? Walmart saved $2.2
billion this year from the Trump tax cut.
The giant tax cut itself was a product of the Business
Roundtable’s extensive lobbying, lubricated by its generous campaign donations.
Several of its member corporations, including Amazon and General Motors, wound
up paying no federal income taxes at all last year.
Not incidentally, the tax cut will result in less federal
money for services on which Americans and their communities rely.
The truth is, American corporations are sacrificing workers
and communities as never before, in order to further boost record profits and
unprecedented CEO pay.
Americans know this. In the most recent Pew survey, a record
73 percent of U.S. adults (including 62 percent of Republicans and 71 percent
of Republicans earning less than $30,000 a year) believe major corporations
have too much power. And 65 percent believe they make too much profit.
The only way to make corporations socially responsible is
through laws requiring them to be—for example, giving workers a bigger voice in
corporate decision making, making corporations pay severance to communities
they abandon, raising corporate taxes, busting up monopolies and preventing
dangerous products (including faulty airplanes) from ever reaching the light of
If the Business Roundtable and other corporations were truly
socially responsible, they’d support such laws. Don’t hold your breath.
The only way to get such laws enacted is by reducing
corporate power and getting big money out of politics.
The first step is to see corporate social responsibility for
the con it is.
and chancellor’s professor of public policy at the University of California,
Berkeley . Robert B. Reich is an American political commentator, professor and
author. He served in the administrations of Presidents Gerald Ford, Jimmy
Carter and Bill Clinton. His most recent book is The Common Good.The views expressed in this article are the