Acton Commentary

How the Clergy Understands Business: Reality versus Caricature


Not long ago, I sent an extensive survey to Protestant pastors of very large churches, most with at least 1,000 people in attendance every Sunday. The survey asked a series of questions about economics, business, the government, and various social issues. Although I am still working my way through a series of statistics, the responses to two particular questions are striking.

Seventy percent of the religious leaders who responded indicated that they “strongly agreed with,” “agreed with,” or had a “mixed opinion” about the following statement: Without close government supervision, corporations will abuse their power .

Thirty-nine percent “strongly agreed with,” “agreed with,” or had a “mixed opinion” about this statement: Because businesses do not usually operate in a moral fashion, more government regulation is needed .

Perhaps with corporate collapses like Enron and Worldcom still fresh in their minds, these Protestant pastors look with a suspicious eye toward most people in the corporate world. In some instances, the suspicion is undoubtedly justified. Maybe, though, there is a different, less justifiable, reason for this suspicion--a tendency to caricature.

Caricatures of corporate types are as old as the corporation. It is not a distinctly post-Enron phenomenon. From Ebeneezer Scrooge to Mr. Potter to Montgomery Burns, the picture is much the same: Business leaders are power-hungry control freaks who seek to rule the world.

Over a recent weekend, I had a unique opportunity. I spent 3 days with CEOs, CFOs, COOs, Presidents, and Vice-Presidents from mid-size to multinational companies. Corporations in the following countries were represented: The Netherlands, Germany, France, Italy, Australia, South Africa, India, the UK, Switzerland, Brazil, Singapore, Luxemburg, Thailand, Austria, and the United States.

The religious leaders who responded to my survey might imagine that most of the conversations, lectures, and panel discussions focused on domination or extension of power. Perhaps the more cynical pastors believe that when such corporate types get together, the conversation revolves around yachts, luxury autos, and mansions. This is the caricature.

The reality is different. The focus of the conference was value creation. Specifically, the attendees discussed how to be not merely profitable, but how to add economic value to their companies for the benefit of shareholders, employees, suppliers, customers and society. As an observer, I can testify that the comments made by these powerful and successful people were in flat contradiction to the caricature.

Business leaders experience tremendous pressure because the well-being of many people depends on their abilities to make the right decision at the right time. The conference participants condemned practices such as short-term thinking for quick financial gain, misstating financial results, unethical behavior, using shareholder money to acquire businesses that added no value to the shareholder, and treating employees like commodities.

They spoke of the absolute necessity of strong ethics not merely as a means to an end but as a way of honoring everyone with whom their business deals. Topics such as transparency, honesty, hard work, and solid decision-making came up frequently.

Perhaps most surprising — given recent controversies about executive salaries and bonuses — this group called for executive compensation to be pegged not merely to profit and loss statements, which can be manipulated by a variety of means. Instead, they promoted the idea that as the total value of the company goes up or down, so should the compensation of the executive. To a person, they advocated the need to peg the salaries and bonuses of employees to the value added or value lost so that the employee has a stake in the corporation's future. When the company grows and becomes more valuable (a criterion much broader than merely a statement of profit and loss), the executives and the employees all gain.

Discussions like these gave me a renewed appreciation for the weight that these people bear. None of them took his or her responsibilities lightly. There was no indication that they were in business solely for their own benefit. They understand their broad and substantial role in building companies that provide value for their societies over time.

Are all corporate leaders this conscientious about their businesses? Of course not. In every walk of life, there are those who abuse the power they have been given or act in unethical and destructive ways. Despite the presence of immoral people in corporations, however, I do not believe that such people are the norm. Unfortunately, a high percentage of my colleagues among the clergy hold a different view and choose the caricature over the reality.