Politics is a dirty word in the corporate world. Bill Shorten’s claim that he was brought undone by big-spending leviathans and behemoths is a poor excuse. Corporations have developed the knack of keeping their hands in their pockets at election time.
These days political donations rank alongside bribery in the growing list of things that ethical, sustainable, socially responsible companies don’t do.
A decade ago BHP was one of dozens of corporations making a modest contribution to both major political parties. Today the company’s code of ethics, Working with Integrity, states: “We will not make political donations in cash or in kind anywhere in the world.”
Curiously, BHP’s moratorium doesn’t extend to activist campaigns to change the Constitution. In February the company announced it was donating $1 million to support an indigenous “voice to parliament”.
This isn’t politics, we are told. It is an act of corporate social responsibility on which the corporate world is in agreement. Rugby Australia chairman Cameron Clyne is on board with EY Oceania chief executive Tony Johnson, Alan Joyce (naturally), Richmond Football Club and Rio Tinto.
Labor was going to put the proposal to a referendum. The Liberal Party opposed it, and the referendum almost certainly would have failed.
As if one contentious referendum wasn’t enough for a first-term Shorten government, many in the corporate world wanted two. In January, Clyne, the former NAB chief executive, assembled a coalition of executives who backed Australia becoming a republic.
Scrapping the link with the monarchy was “actually quite important economically for Australia”, Clyne told the Australian Financial Review. “You do wonder the degree to which our trading partners look at that symbol and question our real commitment to economic integration with Asia.”
Less sophisticated citizens than Clyne will wonder the degree to which the former NAB boss understands what on earth he is talking about. How many more tonnes of iron ore, pray tell, might we have sold if only we dropped the Queen’s mug from the 50c piece? How much foreign capital has been lost because Asian investors shudder at the sovereign risk attached to our sovereign?
Shorten’s claim the bullies at the big end of town “got what they wanted” at the election by spending “hundreds of millions … on advertising, telling lies, spreading fear” is transparently false.
The strength of the quiet Australian vote from the suburbs and regions demonstrated that you don’t always get what you want even if you’re a member of the Chairman’s Lounge, or get to say who gets into the Chairman’s Lounge at Qantas, a company that proudly refuses to give donations in cash or in kind to politicians but has no qualms about supporting all manner of social causes.
Corporate social responsibility with all its contradictions, is the subject of an important monograph by Jeremy Sammut of the Centre for Independent Studies.
CSR has become an industry in its own right, a specialist field of business management consuming ever greater hours of boardroom attention. It employs a steadily growing army of professionals with master’s degrees in sustainability or similar, preaching inclusiveness, respect, dignity and fairness, taking pride in the diversity of their workforces, shrinking their carbon footprint and keeping their work environment, the place we used to call an office, safe from offence and discrimination.
The professionalisation of CSR has come at a cost, Sammut says. Well-meaning sentiments become enshrined in rigid practices that suppress spontaneous order, the lifeblood of successful businesses. Once CSR ceases to be a voluntary external activity and becomes part of the cost of doing business, bureaucracy mushrooms, nonsense job titles proliferate, and process is buried in mumbo-jumbo. Worse, corporations fall prey to shareholder activists whose sole purpose is bending the arms of boards and executives.
Brynn O’Brien, the head of a charity called the Australasian Centre for Corporate Responsibility which has an annual budget of less than $400,000, calls herself a “wrangler of companies”.
Two years ago she led a campaign at BHP’s annual general meeting demanding that the company withdraw its membership of the Minerals Council of Australia, a body accused of “vociferous and influential lobbying” in favour of coal.
BHP’s association with the MCA could “undermine shareholder value, given BHP’s exposure to both climate-related risk and domestic energy policy instability”, read the resolution, parroting the language of boardroom memos.
The ACCR’s stance on climate policy is at the fruitcake end of the spectrum. The only party that comes close to matching it would be the Greens.
The MCA, on the other hand, is a respected industry body that, under its then chairman Brendan Pearson, argued for an evidence-based approach to climate and energy policy recognising Australia’s reliance on baseload coal generation. Yet within weeks BHP was demanding Pearson’s resignation, and it got it. An activist charity (with an annual turnover of $384,000) led BHP (annual revenue about $62 billion) by the nose.
Now ACCR is going after the Business Council of Australia, putting shareholder pressure on corporations to review their membership.
Westpac responded with a statement distancing itself from the BCA’s stance on climate policy. Rio Tinto, BHP and Telstra are also conducting reviews.
It is little wonder that the MCA and BCA were rendered almost mute on Labor’s un-costed energy policy at the last election despite its potential to damage their members’ interests.
Shorten, trapped in a corner and unable to answer legitimate questions, claimed nefarious forces from the Sydney business community paid for climate economist Brian Fisher’s report that blew holes in his policy.
It is nonsense, of course. Corporate Australia didn’t want its hands on it, even though most executives wished it well, recognising the credibility of the findings.
The days when corporate Australia aligned itself with the national interest are long gone. The days when it stood up in defence of good policy are a distant memory.
Now it’s unlikely to speak out on anything meaningful as it cowers in the corner, watching the anti-everything forces march on.
Nick Cater is executive director of the Menzies Research Centre.
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