In 1941, the occupying Nazis began to deport and murder Poland’s Jewish population. This so shocked a German industrialist and Nazi Party member, that he systematically used his personal connections and wealth to shield and protect Jews from deportation and certain death. In the end, he bankrupted his business but managed to save 1,200 Jews, whose descendants still live today.
The story of Oskar Schindler is only the best-known example of German industrialists who put themselves and their businesses at risk to save Jews during the Nazi regime. Others include Berthold Beitz, who similarly shielded Jews while managing an oil field in occupied Poland. It’s noteworthy that neither Schindler nor Beitz were politically motivated nor were they necessarily anti-Nazi, but they were acting on a humanitarian impulse to save lives.
One could argue that wartime and genocide are extraordinary situations and bring out the best in extraordinary individuals. In normal times, it has not been customary for business leaders to weigh in on political matters, less still to take matters in their own hands. The culture that business leaders should stay aloof from politics and focus on maximising shareholder value and nothing else has slowly begun to change. The concept of corporate social responsibility is partly about good public relations but it’s not just that, it also captures the idea that business is part of society and not separate from it, and that business leaders do, therefore, have a social responsibility separate from pleasing their shareholders.
The Canada example
A few courageous corporate leaders have taken this logic one step further and have begun speaking out on issues of national and global concern, using the platform that their position gives them to articulate a liberal and humanitarian view.
After the accidental shooting down of a Ukrainian jet by Iranian authorities, killing all 176 people on board, including 63 Canadians, the CEO of a major Canadian food conglomerate, Michael McCain of Maple Leaf Foods, took the highly unusual step of using the company’s Twitter feed to express his anger at the Donald Trump administration, going so far as to blame the US president and his family, whom he called a “narcissist”, for the death of the wife and child of one of his employees who died in the jet crash. Whether one agrees with McCain that Trump is ultimately to blame for the loss of life in the plane crash or not, what cannot be denied is McCain’s courageous action. His company has important business dealings in the US and any backlash against his comments could seriously harm his company’s bottom line: he clearly has “skin in the game” and therefore his comments have earned credibility. Unsurprisingly, his comments have also elicited a debate in Canada between those who laud his courage and others who decry his overstepping the bounds of conventional corporate responsibility.
Even more recently, the Indian-born American CEO of Microsoft, Satya Nadella, was pointedly asked what he thought about India’s controversial Citizenship (Amendment) Act and the protests it has sparked. While careful to avoid directly criticising the Indian government, Nadella said that it was his upbringing in a multi-cultural India and his immigrant experience in the US that shaped him, and that he would love to see a Bangladeshi migrant become a successful entrepreneur in India. He added that capitalism thrives best with free markets and a liberal political ethos.
Nadella had less to lose
It would be hard to disagree with anything Nadella said, and it’s rather obvious that India is not doing well either in promoting free markets or a liberal ethos currently. The real debate surrounds Nadella’s decision to speak out. Microsoft earned about $1 billion in revenue in India last year, a relatively small share of its global revenue of $125 billion. One could argue therefore, that unlike McCain, Nadella had less to lose by indirectly criticising Indian policy.
For example, if Nadella were asked to share his views on human rights abuses in authoritarian China, would he feel as free to speak up? At the back of his mind, he would be aware that about 10 per cent of Microsoft’s revenues are earned in mainland China and that Chinese authorities do not take kindly to being lectured on human rights.
Nadella’s comments have evoked angst in the ecosystem surrounding the Narendra Modi government, perhaps because they felt that with his background, Nadella was “one of them”. But their real anger should be directed at India’s relative economic unimportance, almost more than a quarter-century after liberalisation.
If India was even half as important to Microsoft’s business as China, Nadella might have thought twice about voicing his criticisms publicly. The correct lesson is not that India should grow rapidly because it’ll be in a better position to stifle dissent and criticism like China, but that the Modi government’s current fixation on its religious and cultural agenda has crucially distracted attention from the economy at a difficult time.
Indian CEOs need to wake up
India’s real GDP growth for the fiscal year about to end is projected to be only 5 per cent, the lowest since the last full year of the UPA government in 2013.
By contrast to Nadella’s candour, Indian business leaders historically have been highly deferential to the point of sycophancy of those in charge, and not without some justification. Unlike in the US or other advanced economies, in which the government has little discretion in trying to punish a business leader they don’t like, in India, governments have ample discretion to hound and harass critics, whether through bogus tax cases or opaque and long-running investigations into their business practices.
The world over, corporate leaders perhaps have begun to realise they’re not merely passive in dealing with governments but wield considerable leverage through their impact on the economy and job creation. For instance, Michael McCain’s company Maple Leaf Foods is set to make a major investment in the US state of Indiana worth about $310 million, which is likely to create many jobs. Politicians in that state may or may not approve of his comments, but they certainly need his investment dollars to create jobs and be re-elected in the stagnant rust belt of the US.
At some point, Indian CEOs may wake up to the fact that they hold similar leverage and could begin to exercise it. Normal times may not require the extraordinary moral courage of a Schindler or Beitz, but no society will function well if its thought leaders, including corporate leaders, operate in an amoral vacuum.
As Nadella rightly observed, capitalism works only if markets are allowed to be free and if a liberal ethos prevails. By contrast, over-regulation and an illiberal ethos are not only bad in themselves, they are not conducive to the success of businesses. Hopefully, India’s corporate leaders will soon begin to connect the dots and develop the courage to start speaking up on what stifles both economic and personal freedoms.
The author is an economist and commentator. She is on Twitter @rupasubramanya. Views are personal.