The Covid crisis is also a red flag for India Inc
Three years ago, California outdoor retail company Patagonia sued former US President Donald Trump for depriving Utah’s public lands of federal protection, potentially opening up two million acres. logging, drilling and mining. Patagonia is known for its environmental activism, as much for its clothing and outdoor gear. The company was joined in its lawsuit by many Native American representative groups because the land, as Patagonia describes it, is a “sacred cultural landscape for the tribes.”
More recently, on April 14, the chief executives (CEOs) of major US corporations released an ad protesting new election laws enacted by various Republican legislatures (Georgia, Texas, or Arizona, to name a few) that threaten to deny voters the right to vote, especially African-American and Hispanic communities. The signatories included the CEOs of Google, Amazon, Starbucks, General Motors, Merck, Netflix. Some CEOs who did not sign the petition, such as Jamie Dimon of JP Morgan Chase, had previously issued statements criticizing the new laws.
These incidents are not one-off events. Corporate America increasingly comes out of comfortable conference rooms to highlight and protest political actions or public policies deemed unfair, or biased against a section of the population, or downright false. This trend of increasing corporate activism has received broad support; it also drew sharp criticism, as might be expected, from right-wing politicians and some deaf business school professors.
Corporate activism can be seen through four lenses. First, it reveals a company’s desire to be counted as a key stakeholder in the larger governance matrix, and not to be seen as a passive legal entity. The second implies an absolute business sense: companies align themselves with environmental or political issues (such as “ Black Lives Matter ”) because their employees and customers (especially millennials) are either directly affected or s ‘care deeply. Silence on important issues can echo loudly on social media. The third objective is strategic: many companies wish to be associated with social or political issues because this is synchronized with their commercial strategy. The somewhat cynical fourth objective sees this activism as a posture or a publicity stunt, and believes that CEOs should focus exclusively on enriching shareholders and not endangering the company through personal political whims.
The increased level of corporate activism appears to be setting a pattern for Joe Biden’s presidency and, perhaps, prompting the administration to move in certain directions. This raises a larger question: Is India Inc setting a model for the Indian government or taking inspiration from New Delhi?
Traditionally, it would appear that Indian companies have always followed the government’s lead. Maybe it’s time to change that. This has become all the more necessary after the government’s inept handling of the covid health crisis in all critical departments – planning, logistics, delivery and even communication – where the private sector typically scores high. But India Inc and the government have proven to be woefully inadequate in one particular area.
India’s dire health infrastructure deficit was glaring after the outbreak of the pandemic in March 2020. Once the government began lifting its lockdown – first partially, then fully – the logical approach would have been to repair our ruined health infrastructure on a war footing. Granted, the government only had a six-month window between the decline in the infection rate in October and the resumption in April. But few attempts were made during this period to rebuild broken supply chains, strengthen distribution networks, or increase the capacity of public health care to the extent possible. Instead, there have been premature celebrations amid questionable allegations about obtaining collective immunity.
India Inc suffers from a similar premature elation and an inexplicable ability to ignore risk, even when it looks companies in the face. In an economy that has just got used to business cycles, Indian companies have often poorly timed their investment decisions and debt activities. Perhaps the roots of this lie in an attitude engendered by decades of protection and an ingrained risk-reward matrix that favors crony capitalism over open competition and fair play. India Inc’s neglect of its workforce in March-April 2020, and again in 2021, also reflects its risk-denial behavior, particularly the multiple long-term implications for future productivity. India Inc’s inability to care for workers (consider how even non-essential staff have been asked to come to work amid rising infection rates) may also stem from a governance deficit. wider.
The current healthcare crisis is a sign that Indian business should change and a sign that it needs to engage in corporate activism of a different kind. In the face of a crisis, the government has repeatedly renounced its civic responsibilities. India Inc must seize the initiative and step into the voids left by the state. He must also resist injustice. Of course, there are a myriad of risks. The government still uses central investigative agencies as an instrument of retaliation. But we have reached a tipping point, and India Inc should now be part of progressive civil society. It might start by becoming more worker friendly.
Rajrishi Singhal is a political consultant, journalist and author. His Twitter handle is @rajrishisinghal.