Even after taking into account that he earned $35 million in pay last year, one can feel just a little pity for David Solomon, the CEO of Goldman Sachs. After all, money isn’t everything.
Goldman Sachs was the first big U.S. bank to pull out of Russia in the wake of the invasion. “Our hearts go out to the Ukrainian people and all those standing in harm’s way,” Solomon said. But then gaffe time arrived: In an interview with Time magazine, he said, “I don’t know that it’s the job of large financial institutions to ostracize Russia.”
Never mind that Solomon emphasized that it was Goldman’s job, as it is for every other business, to honor the law in letter and in spirit, but that it isn’t their job to tell other countries or people how to behave, to play the role of moral arbiter.
That runs dangerously against the prevailing spirit, not only in regards to the Ukraine conflict but to corporate morality in general. People expect business to not just follow the rules and regulations, but to take sides (the correct side, of course) on the great issues of the day.
Responding to the fury, Solomon later said his comments were taken out of context, which is an honorable way of backtracking. But his original remarks should be taken seriously, rather than just crudely condemned as another instance of corporate amorality, or immorality.
Formulating a response to the Ukraine war is a mash-up of ethical values, patriotism, pragmatism (fears of boycotts, bad image) and government-imposed sanctions. It’s often not easy to draw lines.
Yet the biggest corporations are too powerful and pervasive, and their brands too well-known and influential, to hope to remain aloof from political and social controversies. In part, they have themselves to blame: Their marketing has convinced many consumers to see their brands as a part of their personal identity, something not just to be just used but to be loved and remain loyal to. Naturally, they don’t want their car just to give them a smooth ride but to do little harm to the environment; they don’t want to share the enjoyment of that Burger King Whopper they love so much with Russian imperialists.
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Western businesses have been fleeing Russia in droves and those that haven’t, have been forced to make excuses. But those who would like their multinational corporations to be a force for good shouldn’t be looking at Ukraine as the dawn of a great new era. There are ethical principles at play, like not bombing cities to smithereens or the right of self-determination. But the real reason why big business is supporting Ukraine isn’t that, it’s that the U.S. and its allies have become embroiled in something a little short of war with Russia – an economic war but a war nevertheless. The U.S. and European corporations aren’t so much taking a principled stand as they are lining up behind a war effort.
It may be a just war, but first and foremost it’s war and you don’t want to be seen aiding and abetting the enemy.
There’s a lesson to be learned here for the BDS crowd, which is enraged over how quickly the world lined up behind Ukraine while allowing the Palestinian cause to linger ignored for years: there’s a difference. America and Europe have never been at war with Israel, and without that, it’s almost impossible to mobilize masses of ordinary consumers or the elite of powerful CEOs to act.
That doesn’t mean business can or should operate in a moral vacuum. The question is when and why it should act, and I would like to suggest some standards.
The value conundrum
Now, a lot of big corporations, especially those providing consumer goods and services, may decide to do the right thing for business reasons – because it’s good for their marketing and brand image. We shouldn’t confuse that with acting ethically, in a way that they think could hurt profits.
The recent controversy at Unilever illustrates that. Critics among its shareholders say it’s not the company’s business to waste money on goals like environmental sustainability. Its CEO counters that sustainability is not just the right thing to do, it’s good business because customers want that.
But what about when a business has to make a stark choice between maximizing shareholder profits and ethical values?
Certainly, corporations should be called out when their role in bad behavior is direct and makes an actual difference. Selling arms to a country whose army uses them indiscriminately, buying “blood diamonds” that fund vicious guerrilla wars, providing financing to brutal dictatorships, or undertaking mining projects that decimate the environment are situations that easily come to mind.
But even making these seemingly black-and-white moral judgments isn’t always as simple as it seems. If we take these principles and apply them to the Israel-Palestinian conflict, one Haaretz readers are presumably deeply familiar with, you see how knotty they are.
Should Caterpillar, the U.S. maker of tractors that has long been in BDS crosshairs, stop selling bulldozers to Israel because they are used in home demolitions? Palestinians and their supporters say yes because they are being used for collective punishment; Israel supporters argue back that it’s a necessary, if nasty, answer to murderous terrorism.
I have no easy answer to the dilemma, but at least Caterpillar can be regarded as a legitimate target.
The problem is that companies are increasingly being told they should refuse to do business or at least take a stand to protest bad behavior even if it will do nothing to change it. In other words, big corporations should engage in a kind of virtue signaling, on steroids.
That’s asking too much. There are too many controversies, too many pressure groups and too much social media. If companies answered to all of their causes and complaints, they would soon be out of business. Why should the Walt Disney Company have to take a stance on Florida’s “Don’t say gay’ bill?
Getting Mickey Mouse on your side is a big boost for the legislation’s opponents, but they want more than a statement – they want corporate lobbying muscle and money to tip the scales of the democratic process and enmesh Disney in an issue that should be left to civil society to hash out.
In the Israeli context, BDS is mostly about this kind of empty virtual signal: Airbnb’s listing settler homes, Bed & Jerry’s selling ice cream in settlement supermarkets or Dead Sea Cosmetics’ drawing the minerals it uses from an occupied shore of the Dead Sea rather than an Israeli shore. Yes, they help support the occupation, but only on paper.
If Airbnb, for example, stood by the standard that says it can’t do business anywhere where human rights conditions are less than perfect, it would have to limit its business to Europe and North America, and fire a lot of its staff in the process.
The company only pulled out of Russia and Belarus at the start of the war in Ukraine despite both countries’ miserable human rights records. But now America (and Airbnb) are at war.