“Pro-Business” Political Influence, Shareholders & The Economy

Anat Admati and Jerry Davis

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April 21, 2022, we spoke with Anat Admati of Stanford Graduate School of Business and Jerry Davis of the Ross School of Business at the University of Michigan to explore “Corporate Political Responsibility & the Economy: Revisiting ‘Pro-business’ Advocacy”

In the debate over whether businesses should take a stand on broad civic, political and societal issues, few have explored how companies influence policy and narratives on issues related to their core businesses and shareholder returns. As the economy, and particularly corporate governance practices, become “financialized,” ”pro-business” political influence has had a major impact on public discourse and economic outcomes.

Does the status quo truly benefit all --- or only a few --- ultimate shareholders of corporations and the economy as a whole? What is the impact on democracy, and what might true “corporate political responsibility” (CPR) look like in practice?

In this module, we explore:

• Does “pro-business” political influence, as currently practiced, truly benefit shareholders and the economy?
• What is the role of corporate political influence in economic challenges such as short-termism, excessive debt or market concentration?

The Corporate Political Responsibility Taskforce (CPRT)’s Expert Dialogues are in-depth, recorded conversations with academic experts, stakeholder advocates and business practitioners to provide our members and other CPR champions with the expertise and context they need to develop principled, proactive CPR strategies. We invite those interested in a constructive, non-partisan, principles-based discussion.

Anat Admati, George G.C. Parker Professor of Finance and Economics at the Stanford Graduate School of Business, Faculty Director of the Corporations and Society Initiative at Stanford University, Senior Fellow, Stanford Institute for Economic Policy Research, and author of The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It.

Jerry Davis, Gilbert and Ruth Whitaker Professor of Business Administration at the Ross School of Business, Professor of Sociology at the University of Michigan, Faculty Director of Business + Impact, and author of Taming Corporate Power in the 21st Century.

The full transcript for this module is available here. 

Keywords: #CorporatePoliticalResponsibility #ESG #SystemicRisk #CPR_Transparency #CPR_Accountability #CivicInstitutions #EnterpriseRisk #Injustice