Response to WSJ’s “Stocks Weren’t Made for Social Climbing”

Andy Kessler made some interesting points in his piece, “Stocks Weren’t Made for Social Climbing” (1/21/18). Chiefly, we at CECP: The CEO Force for Good, agree with his emphasis on the importance of profits. The issue is how you get there and how to create sustainable value, not just short-term gains.

When he suggests that to invest in socially motivated companies, one is passing up gains, he proceeds from a false dichotomy. Properly realized, the value proposition of a corporation—its outputs, its employee and community relations, its returns, and, yes, its philanthropy—are not linear; they are circular.

Conceiving and executing a “responsible” and “sustainable” strategy need not entail a zero-sum opposition to the pursuit of “returns.” Indeed, when corporate social investment is aligned with a company’s business case, the whole becomes greater than the sum of its parts. Think of it as investing in the company, as a company might do in R&D, marketing, and people development.

This is why CECP’s founders, Paul Newman and John Whitehead, along with now 200 leading CEOs, embraced the enlightened corporation as a “Force for Good” in society.

The key is to think of corporate citizenship as something other than mere cost or spend or giveaway. It is an investment. As Adam Smith wrote, business exists to fulfill unmet needs; corporate investment in society should do no less.

Kessler would pit holistic engagement against productivity. In fact, they are inextricably linked, in the minds of both workers and customers.

As important for investors, according to Nielsen, 55 percent of customers will spend more on products from companies that care.  Read on at CECP Insights Blog.