In this course we will explore the role of business in formulating, influencing and implementing public policy. Many Kennedy School courses put students in the position of public sector officials when exploring public policy issues and analysis. This course offers a different perspective – putting students in the position of institutional investors, boards of directors, and CEOs and senior officers of major global corporations whose use of public policy advances their private interests and may – or may not – advance the public interest.
The course considers the corporate approach to public policy in the context of today’s robust debate on the larger question of what constitutes corporate citizenship---the role of business in society. The course advances for discussion the general proposition that the purpose of the corporation---and the essence of corporate citizenship--is high performance with high integrity and sound risk management. Integrity has three elements: adherence to formal rules both legal and financial mandated by public policy; voluntary adoption of ethical standards—including positions on changes in public policy---that bind the company; and promotion of core company values---honesty, candor, fairness, trustworthiness and reliability.
The course will explore the many issues underlying the mission of performance with integrity as reflected in a corporation’s approach to public policy. For example, is business performance aimed at maximizing shareholder value or optimizing the different interests of stakeholders: not just shareholders but also employees, customers, suppliers, creditors, partners and communities? With respect to business specific public policy what is the proper balance between regulation and deregulation? What is the role of corporations—either alone or in business groups or in larger coalitions---in addressing broader public goods both here and abroad and repairing our dysfunctional political culture?
Individual classes will focus on consequential public policy controversies (cases and readings) in three areas where business has a central role and which present hard questions about the tension between public and private interests:
1. How the division of power between shareholders, directors and management in corporate governance affects critical issues of diversity, sustainability, the causes and response to the financial crisis of 2008-2009 and the responsibility of a utility (PG&E) for wildfire damage it may have caused.
2. Central corporate issues in globalization: corruption, supply chain, climate change, trade and the conflict between a corporation’s ethical standards and national law (i.e. Google in China).
3. Emerging issues in the regulation of big tech: antitrust (Google); the tension between protecting consumer privacy through encryption and protecting national security through access to iPhones (Apple); the propriety of pushing against legal boundaries to create new markets/business (Uber); the vexing issues of regulating the biggest social media platform and different forms of speech on social media---hate, political, fake news etc (Facebook).
The course thus invites students to put themselves in the position of business leaders and to explore the tension between the private interest and the public interest – and to consider different meanings of, and approaches to, the concept of corporate citizenship. The three instructors have had extensive private sector experience in addition to their academic careers: Cavanaugh (the Conference Board); Haigh (AT&T); Heineman (GE). In addition, we will have distinguished guest lecturers from the Business School whose core work is on business in society issues: Rebecca Henderson (climate change) and Lynn Paine (PG&E).