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Articles - Publication Date 4.2.2001
Beware The Coming Corporate Backlash
Americans feel corporations have too much power. To steer clear of trouble, companies need to listen closely to stakeholders and the marketplace.
By Steven Van Yoder
A few years ago, Monsanto Co. had the future in its pocket. The vast life-sciences company promised a revolution in agriculture so profound it would eliminate age-old obstacles to increasing the quality and quantity of the world's food supply. The spread of its genetically modified seeds throughout the U.S., former chairman Robert Shapiro told shareholders, was the most "successful launch of any technology ever, including the plow."
But when Monsanto president and CEO Hendrik Verfaillie stood at a podium in Washington last November to deliver "A New Pledge for a New Company," it was a humbling moment. "We are making a new start as a company completely devoted to agriculture," explained Verfaillie. "And we are doing this at a time when a shift in society -- a shift that started perhaps 40 years ago -- is approaching full maturity. That shift has been a movement from a 'trust-me' society to a 'show-me' society."
The speech, ostensibly about Monsanto's recent merger with Pharmacia Corp., also was an act of contrition. After intense pressure from environmentalists, shoppers, food retailers, and farmers, and an international furor that hit Monsanto's stock like a hailstorm, the company was forced to concede defeat for what critics called a decade long fight to aggressively force its line of bioengineered agriculture products into world markets.
As Verfaillie announced the "New Pledge" -- a set of principles in five key areas outlining Monsanto's policy for the development, use, and stewardship of products of new agricultural technologies -- he explained how the company misread public opinion in the years that led up to that moment.
"Monsanto focused so much attention on getting the technology right for our customer -- the grower -- that we didn't fully take into account the issues and concerns it raised for other people," Verfaillie admitted. "We didn't understand that when it comes to a serious public concern, that the more you stand to make a profit in the marketplace, the less credibility you have in the marketplace of ideas. When we tried to explain the benefits, the science, and the safety, we did not understand that our tone -- our very approach -- was seen as arrogant. We were still in the 'trust-me' mode when the expectation was 'show me.'
Like Monsanto, more and more companies are being forced to the podium of public accountability -- the result of powerful grass-roots interests that have grown highly suspicious of large corporations. "We've entered a period where the perceived power of business has become overwhelming for many," says Charles Derber, professor of sociology at Boston College and author of Corporation Nation (1998, St. Martins Press). "Average citizens fear they are losing control to a corporate ascendancy unmatched since the Gilded Age of the 19th century. We are on the brink of a powerful anticorporate backlash."
Anticorporate sentiment and activism now cut a swath across society, and companies increasingly are finding themselves at the hands of public campaigns to reign in their perceived excesses. Republican Presidential hopeful Sen. John McCain (R, Ariz.) shook up the GOP last year with his anticorporate platform of campaign finance reform and attacks on corporate soft-money donations. And in the final days of his Presidential campaign, Al Gore gained high ratings with his pledge to take on "big tobacco, big oil, big polluters." He lost that race in part due to the anticorporate message of Ralph Nader.
The growing suspicion that corporations have grown too large and unaccountable does not bode well for companies that ignore its implications. "The public is predisposed to be critical of corporations and they are ready to believe negative assertions about big business," says longtime pollster and chairman of DYG Inc. Daniel Yankelovich. "Executives haven't had to worry about social issues for a generation, but there's a yellow light flashing now, and they'd better pay attentio
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