Daily BulletinHoliday Centre

The Conversation

  • Written by Carl Rhodes, Professor of Organization Studies, University of Technology Sydney
Swollen executive pay packets reveal the limits of corporate activism

Qantas boss Alan Joyce is reportedly Australia’s highest-earning chief executive. He’s also a firm believer in corporate activism.

His pay packet is estimated to have been A$23 million last year – though it’s apparently dropped a little since.

Joyce thinks he should use his position to push social causes he believes in. Under his watch, Qantas strongly backed the 2017 campaign for same-sex marriage, much to the chagrin of politicians with a different view.

Read more: The market for virtue: why companies like Qantas are campaigning for marriage equality

Senior government minister Peter Dutton told business leaders at the time of the same-sex debate to “stick to their knitting”. Similar sentiments have been expressed recently by Ben Morton, the point man of prime minister Scott Morrison.

Corporate leaders should mind their own business and focus on maximising shareholder value, Morton told the Australian Chamber of Commerce and Industry.

Joyce responded. “That’s democracy and companies are part of democracy, we represent individuals, passengers, employees, shareholders,” he said “We should have a voice on that, and it shouldn’t get to a stage if you don’t agree, don’t speak up, because I think that’s bad for democracy.”

It seems like it has the makings of heavyweight stoush. But really it’s a phoney war.

All this twisted debate in which chief executives talk about democracy and politicians about business management shows are the limits of corporate activism.

The whole thing is simply a distraction from the need for a real debate about the fact already huge CEO salaries continue to grow while average wages stagnate.

Moral postures

Morton, who is assistant minister to the prime minister and cabinet, unleashed his critique in the wake of reports companies were giving employees time off to attend climate change rallies on September 20.

“Too often I see corporate Australia succumb or pander to similar pressures from noisy, highly orchestrated campaigns of elites typified by groups such as GetUp or activist shareholders,” Morton said.

Read more: What's behind the current wave of 'corporate activism'?

“Too often big businesses have been in the front line on social issues, but missing in action when arguing for policies which would grow jobs and the economy.”

This could well have been interpreted as criticising the likes of Joyce – and Joyce certainly appeared to jab back when he addressed the National Press Club a few days later.

He listed advocating for company tax cut and its industrial relations reforms as evidence he and other chief executives talked about major economic issues.

But businesses that ignored social issues, he said, hurt their bottom line: “You have to do both – and good companies will do both.”

In defence of inequality

Looking beyond Joyce and Morton’s hyberbole, what’s evident is what the debate is not about.

It entirely avoids the problem of the broadening gap between the rich and poor.

Whatever Joyce’s social justice instincts on other issues, he is clearly not the person to talk about about inequality. But it’s not just that he’s silent on this issue. Instead of retreating to his counting house, he came out swinging in defence of his earning almost 300 times the average Aussie income.

Read more: CEO pay is more about white male entitlement than value for money

“My salary was determined by our shareholders,” he said. “That’s because our market capital went from just over $2 billion to $10 billion. And our shareholders did exceptionally well out of it”.

So much for the quiet Australians

Morton said he had “an old-fashioned view” that businesses should “maximise return to their shareholders”.

The case of Alan Joyce shows profit maximisation is not at all incompatible with corporate activism. Nor is support for a limited range of progressive social causes incompatible with defending the inequality epitomised by super-size executive salaries.

Morton described himself as standing up for the “quiet Australians”. So it might be considered an irony that his complaints about CEOs pandering to a left elite helped distract attention from the issue of inequality.

Read more: Another official Australian report has been doctored to gloss over rising inequality

Joyce meanwhile insisted he would continue to do what is “morally right” for society.

But declaring unelected corporate executives have a responsibility to use their privileged position in the economic pecking order to push business-friendly political causes is, at best, controversial. At worst, his belief he has the right as a chief executive to represent people who haven’t chosen his as a political representative is downright anti-democratic.

All this quibbling narrows the political and economic agenda to a sterile debate between “good ethics is good business” activism and good old-fashioned capitalism.

Whichever one you pick, the fair distribution of economic prosperity among working Australians has been left off the democratic table. Such are the limits of CEO activism.

Authors: Carl Rhodes, Professor of Organization Studies, University of Technology Sydney

Read more http://theconversation.com/swollen-executive-pay-packets-reveal-the-limits-of-corporate-activism-123988

INTERWEBS DIGITAL AGENCY

The Conversation

Politics

Closing the Gap Statement to Parliament

Mr Speaker, when we meet in this place, we are on Ngunnawal country. I give my thanks and pay my respects to our Ngunnawal elders, past, present and importantly emerging for our future. I honour...

Scott Morrison - avatar Scott Morrison

Prime Minister Interview with Alan Jones

ALAN JONES: Prime Minister, good morning.    PRIME MINISTER: Good morning, Alan.    JONES: I was just thinking last night when we're going to talk to you today, you must feel as though you've ...

News Company - avatar News Company

Prime Minister Bridget McKenzie press conference

PRIME MINISTER: Good afternoon everybody. The good news is that the Qantas flight is on its way to Wuhan and I want to thank everybody for their cooperation, particularly the Chinese Government as...

Scott Morrison - avatar Scott Morrison

Business News

Choosing the Right Coworking Space For Your Business

As the capital of Victoria in Australia, Melbourne is inhabited by millions of people and is known as one of the most liveable cities in the world. The latter is due to the city’s diverse community...

Sarah Williams - avatar Sarah Williams

What Should You Expect from A Carpentry Apprenticeship?

Those wanting to pursue a career in woodwork, whether it be to make furniture, construct buildings or repair existing wooden structures, will have to first commence a carpentry apprenticeship. This ...

News Company - avatar News Company

4 Tips To Choosing A Reliable SEO Company For Your Digital Marketing Agency

Working with a digital marketing agency Perth is the best bet in ensuring that your business is promoted well in the online space. If you are an app developer Perth, you may have to work closely wit...

News Company - avatar News Company

Travel

Travelling With Pets? Here Is What You Should Know

Only a pet parent can understand the dilemma one experiences while planning a vacation. Do you leave your pets at home?  Will you get a pet sitter or someone to take care of them while you are away?...

News Company - avatar News Company

How to Be a Smart Frugal Traveller

You are looking through Instagram, watching story after story of your followers overseas at a beach in Santorini, walking through the piazza in Italy, and eating a baguette in front of the Eiffel ...

News Company - avatar News Company

HOW TO PREPARE FOR YOUR GRADUATION TRIP

Graduation is the stage of life when a student receives the rewards of hard work of years. It must have taken sleepless nights and tiring days to achieve the task. Now, as you have received your cov...

News Company - avatar News Company

ShowPo