Jamie Dimon, JP Morgan CEO, has been the first global leader to acknowledge the policymaking malaise. In 2019, in his letter to shareholders, he took on America public policy that “is a major concern” as “governments need help”. In his view all issues are fixable provided that “businesses, government and community … work as partners” and, he continues, if “we set aside partisan politics and narrow self-interest”. The core of the challenge is that “Governments must be better and more effective — we cannot succeed without their help. The rest of us could do a better job, too”. He concluded with a call to action:” CEOs: Your country needs you”.
Mr. Dimon’s tenure, standing and achievements are unique. The Influence, Relevance and Growth methodology, however, provides CEOs that share his view with an operating model to “do a better job”. Its parameters are quantifiable, business focused, actionable and engineered to inform policymakers and stakeholders. It makes corporations more extroverted and equipped to work, as partners, with other constituencies. It allows to stand clear form the political fray and to properly manage expectations.
Democracies are delicate. The Economist Intelligence Unit’s 2022 Democracy Index provides a snapshot on how democracies can turn into a more flawed system. Close to half of the world’s population (45.3%) lives in a democracy of some sort. Only 8% resides in a “full democracy”, compared with 8.9% in 2015, before the US slid into a “flawed democracy” in 2016.
Four constituencies are the pillars to its existence: governments, corporations, Media and NGOs (Non-Government Organizations). This quartet allows five essential activities: electoral process and pluralism, functioning of government, political participation, political culture, and civil liberties. The Democracy Index evaluates each dimension with a score of 1 (min) to 10 (max).
The world’s best democracy is Norway with a 9.81 score. The United States rank number 30 in the world with a score of 7.85. Its shortcomings are to be found in the “functioning of government” and “the political culture”. Of the largest European economies Germany, UK and France are “Full Democracy” ranking number 14, 18 and 22, respectively and, Italy, a “Flawed Democracy” according to this index, ranks 46 in the world.
This increased disaffection for democracy is evidenced by the declining voter turnout since the beginning of the 1990s. Fewer citizens consider elections the main instrument for legitimizing political parties’ control over political decision making, according to the International Institute for Democracy and Electoral Assistance. The trust, as illustrated in our previous newsletters, has now titled in favor of corporations. This is unfortunate.
How the corporate world interacts with policymakers in these unprecedented times will be vital to the continued success of western society, and for those elsewhere who aspire to it.