Politics doesn’t belong in the boardroom

Tom Giovanetti Contributing columnist

Doesn’t it seem that everything has become political?

It used to be that politics was one area of life. We socialized with folks at work, church and community organizations without caring or even knowing what parties they belonged to.

If I sound wistful for such times, I would, wouldn’t I? After all, I’m a conservative. A core instinct of conservatives is that most of life should happen outside politics. We want life to be about family, neighbors, jobs, churches and volunteer organizations. We want government to perform its basic functions, and — if it does — it will largely stay out of our way.

For the progressive left, on the other hand, politics is everything and everything is politics. Convinced of the moral superiority of their agenda, many progressives are determined to impose their preferences on others. When they can’t get their way through the legislative process, they do an end run around democracy.

This is why nothing today can escape politics.

The strategy has expanded to corporate America, where activists pressure businesses to adopt progressive policies through organized shareholder activism. Companies with business lines often wholly unrelated are being asked to take action on such issues as the rights of indigenous peoples, the use of pesticides, deforestation, gender justice, clean energy and climate change.

Individual investors want — and need — returns, not politics, from their stock investments. According to a recent poll by Spectrem Group, around three-quarters of pension plan members believe managers should focus on maximizing returns; a small portion wants managers to focus on social and political causes.

The good news is that Congress is aware of the problem and is considering the Corporate Governance Reform and Transparency Act of 2018, which has passed the House and is being considered by the Senate. And the Securities and Exchange Commission has announced that it will hold a round-table discussion on the issue — usually a first step toward a new rule-making or clarification of rules.

But the pushback has begun. In his influential New York Times column, Andrew Ross Sorkin recently mischaracterized this effort as simply protecting “corporations that are unwilling and unprepared to adapt to a changing world.”

But Sorkin has this one wrong. The effort by ideological activists to politicize corporate governance cuts cleanly across the interests of ordinary shareholders, and they know it. According to a 2017 analysis by Broadridge and PricewaterhouseCoopers, the large institutional investors supported environmental and social board resolutions 54 percent of the time; only 10 percent of shares held by individuals supported such resolutions.

If we want maximum economic growth and job creation, and workplaces free of political conflict, corporate management needs to be free to pursue maximum value for the good of their employees and shareholders, free of political manipulation. Let’s start pushing politics out of every aspect of life, including the boardroom. OLITICS COMMENTARY DA

Tom Giovanetti Contributing columnist
https://www.yourdailyjournal.com/wp-content/uploads/2018/09/web1_giov.jpgTom Giovanetti Contributing columnist

Tom Giovanetti is president of the Institute for Policy Innovation, a public-policy research organization in Dallas. He also has been a freelance policy writer and the director of product development for a small manufacturing company in Dallas, where he designed several patented products. Tribune News Service distributed this column.

Tom Giovanetti is president of the Institute for Policy Innovation, a public-policy research organization in Dallas. He also has been a freelance policy writer and the director of product development for a small manufacturing company in Dallas, where he designed several patented products. Tribune News Service distributed this column.