OPEN APP
Home >Opinion >Columns >Covid crisis is a wake-up call for India Inc as well

Three years ago, California-based outdoor retail company Patagonia sued former US president Donald Trump for depriving public lands in Utah of federal protection which would potentially open up two million acres for logging, drilling and mining. Patagonia is known for its environmental activism, as much for its outdoor clothing and gear. The company was joined in its suit by many Native American representative groups because the land, as Patagonia describes it, is a “cultural landscape sacred to tribes".

More recently, on 14 April, the chief executive officers (CEOs) of leading US firms released an advertisement protesting against new voting laws being enacted by various Republican legislatures (Georgia, Texas or Arizona, to name a few) that threaten to disenfranchise voters, especially from African-American and Hispanic communities. The signatories included the CEOs of Google, Amazon, Starbucks, General Motors, Merck, Netflix. Some CEOs who didn’t sign the petition, such as Jamie Dimon of JP Morgan Chase, had earlier released statements criticizing these new laws.

These incidents are not one-off occurrences. Corporate America is increasingly stepping out of comfortable boardrooms to highlight and protest political actions or public policies that are deemed unfair, or biased against some section of the population, or outright mendacious. This strengthening trend of corporate activism has received widespread support; it has also attracted sharp criticism, predictably from right-wing politicians and some tone-deaf business school professors.

Corporate activism can be viewed through four lenses. First, it reveals a firm’s desire to be counted as a key stakeholder in the broader governance matrix, and not be seen as a passive legal entity. The second involves hard-core business sense: Firms are aligning with environmental or political issues (such as ‘Black Lives Matter’) because their employees and customers (especially millennials) are either directly affected or deeply care about it. Silence over important issues can reverberate loudly on social media. The third lens is strategic: Many companies want to associate with social or political issues because it syncs with their business strategy. The fourth lens, somewhat cynical, views such activism as posturing, or as a publicity stunt, and believes that CEOs should focus exclusively on shareholder enrichment and not endanger the company over personal political whims.

The increased level of corporate activism seems to be setting a template for the Joe Biden presidency and, perhaps, impelling the administration to move in certain directions. This throws up a larger question: Is India Inc setting a template for the Indian government or taking its cues from New Delhi?

Traditionally, it would seem, Corporate India has always followed the government’s lead. It is time, perhaps, to change that. This has become all the more necessary after the government’s inept handling of the covid health crisis in all the critical departments—planning, logistics, delivery and even communication—where the private sector usually scores high. But both India Inc and the government have been revealed to be woefully inadequate in one particular area.

The glaring deficit in India’s health infrastructure was conspicuous after the pandemic broke in March 2020. Once the government started lifting its lockdown—first partially and then fully—the logical approach would have been to repair our crumbling health infrastructure on a war footing. Admittedly, the government got only a six-month window between the infection rate abating in October and then picking up in April. But few attempts were made in this period to rebuild broken supply chains, strengthen distribution networks or increase public healthcare capacity by whatever extent possible. Instead, there was premature rejoicing amid dubious claims of attaining herd immunity.

India Inc suffers from similar premature elation and an inexplicable ability to disregard risk, even when it is staring businesses in the face. In an economy just getting used to business cycles, Indian firms have often mistimed their investment decisions and debt-loading activity. The roots of this perhaps lie in an attitude bred by decades of protection and an entrenched risk-reward matrix that privileges crony capitalism over open competition and fair play. India Inc’s neglect of its workforce in March-April 2020, and once again in 2021, also reflects its risk-denial behaviour, especially the multiple long-term implications for future productivity. India Inc’s failure to look after workers (consider how even non-essential staff was asked to commute to work in the midst of rising infection rates) perhaps also springs from a broader governance deficit.

The current healthcare crisis is a sign that Corporate India should change, and a portent that it needs to indulge in corporate activism of a different kind. In the face of a crisis, the government has repeatedly relinquished its civic responsibilities. India Inc must seize the initiative and step into the gaps left by the state. It also needs to stand up to injustice. To be sure, there are myriad risks. The government still uses central investigative agencies as instruments of reprisal. But we’ve reached a tipping point, and India Inc should now become part of progressive civil society. It could start by becoming more labour-friendly.

Rajrishi Singhal is a policy consultant, journalist and author. His Twitter handle is @rajrishisinghal.

Subscribe to Mint Newsletters
* Enter a valid email
* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our App Now!!

Close
×
Edit Profile
My ReadsRedeem a Gift CardLogout