This week a group called JUST Capital released its annual rankings of American corporations. It’s called the “Just 100.” You probably didn’t notice. It’s the kind of thing public relations professionals pay attention to—a niche “news” item that historian Daniel Boorstin would call a pseudo-event. But precisely because it is a niche concoction of publicity about the social responsibilities of corporate America (or, rather, about a particular vision of what it means for companies to be just), it’s the kind of thing I also tend to pay attention to. Call it a professional hazard.
I want to make note of three things about the Just 100. The first is pretty obvious: the medium in which this information is presented. It is a ranked list. And we love to read ranked lists of just about anything—Top Five NBA Power Forwards, Ten Worst Presidents, or (in the old era of Buzzfeed) 50 People You Wish You Knew In Real Life. It was Fortune magazine that ushered in the era of corporate rankings with the Fortune 500 in 1955 (around the same time that radio DJs developed the Top 40 format). The idea was simple: Rank the top 500 publicly traded companies according to revenue and profit. It was a fitting idea for an era in which large corporations, larger than ever before, came to dominate the American economy. It was also a clever format during a mid-century moment when the circulation of magazines grew to unprecedented size (annual lists, it turned out, made for great newsstand sales).
By the early 1980s (at the same time that U.S. News & World Report began publishing its influential rankings of colleges and universities), there were two more lists on the scene of business journalism: America’s Most Admired Companies and the 100 Best Companies to Work For. These, too, were fairly straightforward compilations of survey data—of US public opinion in the former case and of employees in the latter. But unlike the Fortune 500, these lists presented companies with a new way to compete. While corporate revenues and profits were standard tokens of financial data—symptomatic, if you will, of the size and health of a company or the conditions of an industry—categories of admiration and job satisfaction were more contingent and more moldable. In other words, executives could take steps to make their organizations, whatever the size, into better places to work and or to improve their companies’ reputations.
What I’m describing, in short, is the growing importance of brand management. The late twentieth century was a time when consumers began paying more attention to the conduct of large corporations. Influential publications such as Shopping for a Better World: A Quick and Easy Guide to Socially Responsible Supermarket Shopping (which debuted in 1988), for example, shaped public awareness about brands that contributed to pollution or human rights abuses. And the growing ranks of white-collar jobs made it more important to recruit and retain college educated, middle class professionals. And if you were a chief executive, one part of securing a competitive advantage for your firm in both the professional labor market and consumer markets was to make sure that your company’s name was at a non-embarrassing position on an ever expanding number of rankings. Not just America’s Most Admired Companies or Best Companies to Work For but also 50 Best Companies for Minorities, 100 Best Companies for Working Mothers, Inner City 100, Top 30 Companies for Executive Women, Global 100 Most Sustainable Corporations in the World, and the list went on. By the turn of the millennium, new rankings lists began to focus more on sustainability, social responsibility, and the elusive category of “corporate citizenship.” Many companies employed the services of organizations such as the Reputation Institute (founded by a couple of business school professors in 1999 and now called RepTrak) to help keep track of these things and to perform better.
The basic story is this: Rankings lists that originated as research instruments intended to describe the world as it exists by reporting on what was going on in American business eventually morphed into advocacy tools for shaping the conduct of business—or at least the way that we talk about the conduct of business. A cottage industry of nonprofits and quasi journalistic outlets, in close partnerships with businesses eager to make self-promoting disclosures, found themselves in what our society considers perhaps the most enviable position of all: shaping the conversation. JUST Capital, then, is playing a decades-old game.
The second thing I want to mention is the organization that publishes the Just 100. JUST Capital is a non-profit founded in 2015 by Paul Tudor Jones II, a billionaire hedge fund manager and philanthropist, along with a handful of other entrepreneurs and investors as well as media mogul Arianna Huffington and New Age pseudo-science self-help guru Deepak Chopra. The board of directors is drawn from well-known organizations in the worlds of corporate consulting, big tech, think tanks, and NGOs.
JUST Capital presents itself as a research institution that produces objective data about corporate conduct, but it straightforwardly seeks to promote a version of stakeholder capitalism. That is, the view that businesses succeed when they “create value” for workers, consumers, suppliers, and so forth. As an ethical vision for making the world a better place, it’s pretty thin gruel. As an account of what actually happens in history, it leaves a lot out. But it’s one of the most popular ideas among big-name CEOs, business influencers, and b-school professors.
Some of the categories that JUST Capital uses in its rankings are fairly sturdy: Paying workers a living wage, for example, having good privacy policies, and creating jobs in the US are things that can be established and traced with some confidence. But other categories such as acting “ethically at the leadership level” or prioritizing “accountability to all stakeholders” are simply so vague, subjective, or circular that it seems doubtful whether they are of much value at all. At the end of the day, the companies that they focuses on are publicly traded corporations with substantial financial obligations to shareholders that limit the ability of executives (whether they want to or not) to focus on matters of justice. You might think an organization called JUST Capital would be interested in these basic matters of governance, but there’s not much evidence that it does.
There is a veneer of scientific objectivity to the way the Just 100 is presented at such outlets as CNBC. But if you drill down below the surface of reports such as this, you’ll find, to borrow the words of the great historian Robert Heilbroner, a “more or less transparent defense of privilege masquerading as philosophy.” In this case, a supposedly new way of “doing capitalism” looks a lot like a bland repackaging of the same old thing. They won’t talk about this on CNBC, of course, nor in the business pages of the top newspapers, but it matters because it contributes to an impoverished moral discourse about what we expect from business institutions.
Which leads me to my final point, and I’ll let a short excerpt from the book do the work for me:
It may be tempting to imagine that what we need is more data about corporate conduct collected in a more systematic and rigorous manner—like financial measurements computed on a spreadsheet. Indeed, it seems that many activists and consultants believe that well-branded and publicized lists of corporations ranked according to new criteria of sustainability or equity of various kinds—along with associated boycotts, investment funds, or asset categories—are just the tools we have been looking for. Such projects of information gathering (much like the publicity efforts of the Progressive Era) may seem attractive because they appear rational and objective. It is a way to fight fire with fire—or, in this case, a way to face off against investors and chief financial officers by use of a different form of accounting.
But these appeals to scores and rankings, some of which claim to put a dollar figure on ethical misconduct, tend to dissolve into yet another form of corporate risk management. More significant, they elude and obscure the reality of the human person and the obligation each of us has to act responsibly and not defer to bureaucratic rule by no one.
A few more things…
The book will be out on February 20! If you haven’t yet, would you consider pre-ordering?
If you’re in the Charlottesville area, I’d love to see you at the book launch event at New Dominion Bookshop on February 24 at 7 pm. More information here.
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The website is at www.kyleedwardwilliams.com.