Covid-19 pandemic shows why people and the environment should be at the heart of business
- Prioritising profit imperils people and the planet. As firms reach for bailouts, they must be required to democratise, to give workers an equal say with investors, and adopt strict environmental standards
- Meanwhile, a job guarantee scheme that gives all people access to work would allow them to live with dignity
One of the central lessons of the current crisis is that working humans are far more than “resources”: the people keeping life going through the Covid-19 pandemic prove daily that work cannot be reduced to a commodity.
By involving employees in decisions relating to their lives and futures in the workplace – by democratising firms. By decommodifying work – collectively guaranteeing useful employment to all.
Each morning, men and women rise to serve those among us who are able to remain under quarantine. The dignity of their jobs needs no other explanation than that eloquently simple term, “essential worker”.
In it, we see that human beings are not one resource among many: without labour investors, there would be no production, no services, no businesses at all. And each morning, quarantined men and women rise in their homes to fulfil the missions of the organisations they work for.
But although they are the core constituency of firms, workers are mostly excluded from participating in firm governments – a right monopolised by capital investors.
Democratising firms is also necessary. About a century ago, women’s undeniable contribution to society helped win them the right to vote in many countries. Now it is time to enfranchise workers. Representation of labour investors in the workplace has existed in Europe since the close of the second world war, through Work Councils.
Yet, these representative bodies have a weak voice at best in firm governments, always subordinate to the executive teams appointed by shareholders. They have been unable to stop or even slow the momentum of self-serving capital accumulation, particularly in its destruction of our environment.
These bodies should be granted similar rights to those of boards: firm governments (that is, top management) should be required to obtain double majority approval from workers as well as shareholders.
Different forms of co-determination implemented after the second world war were a crucial step towards giving voice to workers in some countries – but remain insufficient to create actual citizenship in firms.
There is now a growing global call to give labour investors the right to elect representatives with a supermajority within boards. Issues such as choosing a CEO, strategy-setting, and profit distribution are too important to be left to shareholders alone.
A personal investment of labour – of one’s mind and body, one’s health, one’s very life – ought to come with the collective right to validate or veto these decisions.
This still-unfolding tragedy enjoins us to remember: certain strategic and collective needs must never be treated as commodities. Profitability is an intolerable yardstick when it comes to our health and life on this planet. To continue arguing to the contrary is to imperil our communities with dangerous ideology.
In 2008, governments responded to the economic crisis with an unconditional bailout. In the name of the democratic societies they serve, and which constitute them, in the name of their responsibility to ensure our survival on this planet, governments cannot react now with the same innocence.
As they step in to save businesses today, they must demand that businesses step in as well. Firms should be required to meet the basic conditions of democracy internally, as well as strict environmental standards.
A successful transition from environmental destruction to recovery and regeneration will be best led by democratically governed firms, in which the voices of those who invest their labour and those who invest capital work together with an equal voice to address these issues.
Certain socially minded or cooperatively run businesses – pursuing hybrid goals that take financial, social, and environmental considerations into account, and developing democratic internal governments – are already showing the positive impact of such shifts.
Let us fool ourselves no longer. We have had more than enough time to see what happens when labour, the planet and capital gains are placed in the balance under the current system: labour and the planet always lose. Another option is available. Democratise firms; decommodify work; focus together on sustaining this planet.
Isabelle Ferreras is a professor at the University of Louvain, a tenured fellow of the Belgian National Science Foundation and a senior research associate of the Labor and Worklife Program at Harvard Law School.
Julie Battilana is the Joseph C. Wilson Professor of Business Administration at Harvard Business School and the Alan L. Gleitsman Professor of Social Innovation at the Harvard Kennedy School.
Dominique Méda, a professor of sociology at the University of Paris-Dauphine also contributed to this article. For a full list of the more than 3,000 signatories to this article, see here
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