Jamie Dimon, chief executive officer of banking giant J.P. Morgan Chase, kicked off a debate on capitalism with his annual letter to shareholders this spring. “The American Dream is alive — but fraying for many,” he wrote. “Simply put, the social needs of far too many of our citizens are not being met.”
Dimon pointed to a list of shortcomings — from education to infrastructure to health care — and asked: “Is capitalism to blame? Is socialism better?” His quick answers were that capitalism is the best thing going — although it has its flaws — and that socialism doesn’t work — although he did give a shout out to “social democracies,” which combine market economies and strong social safety nets.
But the banking titan did argue government and business leaders can do more. “We need a Marshall Plan for America,” he said. “Democrats have to acknowledge that many of the things that have been done as a nation — often in the name of good — have sometimes not worked….[And] Republicans need to acknowledge that America should and can afford to provide a proper safety net for our elderly, our sick and our poor.”
And to ceo’s, Dimon said: “Your country needs you. It’s not enough just for companies to meet the letter and the spirit of the law. They can also aggressively work to improve society. They can take positions on public policy that they think are good for the country.”
WWD asked Emanuel Chirico, who is chairman and ceo of PVH Corp. and has spoken forcefully about the good companies can and must do, to tackle the issue.
WWD: Is American capitalism working and, if not, how should it be fixed?
Emanuel Chirico: We still live in a capitalistic society, which is driven by profitability, but there’s been an evolution in how big American companies operate. In the past, it was all about maximizing profits and growing the company, but I think how you do business is just as important now in measuring success.
We’re in a period of rapid change and unprecedented challenges. There is a leadership void around the world and that includes the U.S., and we’ve have seen many governments not prepare for the future, with issues ranging from retirement and infrastructure to automation, immigration and worker retraining.
As a result, society is demanding more from the private sector and its business leaders. Being a business leader today means taking a stand on the important issues of the day, and for me, personally, I think getting involved behind the scenes through committees and advisory boards is the most effective way to influence meaningful change.
Right now, we’re a divided nation on a lot of issues but there’s not enough middle ground. When you run a global company, you need to recognize the leadership role you play in society. You need to be as transparent about your social responsibility initiatives as you are on your financial reporting, and as leaders we now have a responsibility to make our voices heard. I think it’s important for leaders to ask themselves what issues are key to their company’s values and what drives their businesses.
WWD: What responsibility do companies have to the greater good?
E.C.: Growing up, I was always taught that the more you are given, the more that is required of you. That’s had an impact on my personal life but also guided the way I do business.
We have to be driven by more than just the bottom line, although if you’re not delivering financial results you’re not going to have the power and resources to deliver the good that you want to do.
Companies today can’t just work to benefit their stockholders — we have to consider the impacts we have on stakeholders all over the world. Not only is it the right thing to do, but it is what consumers expect today. They want to know that you’re making positive impacts on your workforce, the environment and the communities you touch.
Given the social and political landscape that we’re operating in today, companies and their leaders have been pushed to take accountability in functions that might not have been so obvious in the past: from inclusion and diversity to sustainability and philanthropy. Every company has a choice about how it wants to act, and it’s critical to follow a moral compass. At PVH, our values guide us in our decisions and behaviors so we can drive fashion forward — for good.