Corporate Governance

Richard Haass discusses his new book, The Bill of Obligations: The Ten Habits of Good Citizens, and how the private sector benefits from a functioning, stable, accountable democracy. Haass details ways corporations can promote civic participation and calls for the prioritization of what he describes as CCAD: Corporate Commitment to American Democracy.   PORAT: Good morning, everyone. I’m Ruth Porat, senior vice president and chief financial officer of Alphabet and Google and a member of CFR’s Board of Directors. And I’m pleased to welcome you all to today’s Q&A with CFR president Richard Haass on his newest book, The Bill of Obligations: The Ten Habits of Good Citizens. Throughout his very distinguished career Richard, in addition to leading CFR for the past two decades, which, unfortunately for us, he has announced is drawing to a close, has served in the administration of four American presidents and, more important, appears regularly on my television screen at 4:00 in the morning out here in California on Morning Joe. So, Richard, welcome. Great to be with you. The title of your book is clear, at least, to me. We’re very privileged to live in a democracy and we better not take that for granted or the whole thing can become undone. You’ve said that the biggest threat to American democracy is not the foreign elements that have been your life’s work but ourselves. So I guess I could ask what the ten habits are and let you talk but that would, obviously, be too easy. So let’s start with a bit of your history. You’ve worked across the political spectrum. You’ve led a nonpolitical organization for twenty years. Tell us how that background shaped your outlook and how it might have influenced your motivation to write this book. HAASS: Thanks, Ruth. Thanks for doing this. Thanks for doing all else you do for us and you do for others. It’s great to be with you if only virtually. Look, I think if you’re nonpartisan—you know, I began as a Democrat, became a Republican, and a couple years ago decided I was no longer comfortable in the Republican Party. Became a no party affiliation. To me, and even when I was a Republican I would vote for Democrats if I happened to like them more. To me, party never came first. What came first was policy and what I thought was best for the country. And I’d look at candidates, I’d look at issues, and it didn’t much matter to me what the label was or what one or another party supported. I just always did what I thought was smart and what I thought was right, and coming to this book I just worried that this country had just become way too divided. Too many people were putting either their own ambitions or their party or their movement first and we were losing sight of what, essentially, this country was based on, which is a set of ideas which is central. You know, this is—we don’t have demography that brings us together. We don’t have geography that brings us together. There’s lots of other divides in this society. But what was meant to bring us together was certain principles articulated in the Declaration of Independence. I understand all too well we didn’t always live up to them but those were important ideas. I think we’ve made enormous progress over the last two and a half centuries. But what worried me and what, in large part, led to this book is that I thought we were losing sight of that for many reasons. We can discuss how we came to this point, and what January 6 and other things brought home to me and I expect to you is I don’t take for granted that what’s been out here for two and a half centuries is somehow permanent, that it will be in place down the road, or even if it is technically in place I worry about how we could—it could deteriorate, that we could, yes, technically have a democracy but it actually might be a lot less functional and a lot less democratic, and it’s those concerns that that brought me to write this. PORAT: Very well put, and it really takes me to the next question I wanted to ask, which is about youth today. In your book you cited a stat that in a recent survey only 57 percent of young people, people eighteen to twenty-nine, said it was very important that our country is a democracy. You know, I was Googling it, which I had to do, and saw that 34 percent of that same age group actually believe that the Earth is flat but—for context, but sad that the percent—57 percent—is so low and maybe not surprising, given their life experience with the financial crisis at one end and, to your point, January 6 most recently. So what do you say to that 57 percent? What has history taught us about what makes a successful democracy and why we all need to be fighting for it? HAASS: First of all, I’d be remiss if I didn’t say somehow I’m not shocked that you actually Googled this. Anything less would—shall we say, that would be shocking. Look, I think it’s important to give people perspective, even though as you alluded to I understand why people do this. There’s a little bit of a what has this done for me and people look at 2007, 2008, or they look at the recent inflation or they look at the wars in Iraq and Afghanistan or they look at inequality or wage stagnation. I understand. Crime. Yeah, it’s a long list. There’s all the flaws in our society, all the flaws in our policy, and particularly younger people who haven’t studied a lot of history, haven’t experienced other phases, say, well, what’s so good about this and, indeed, that’s, in many ways, what fuels populism. People get up. They associate the existing system with policies they judge to be not in their interest or badly broken. So they’re willing to throw out the baby with the bathwater or whatever other, you know, metaphor one wants to use, and I think that’s dangerous, and I think it’s important to remind people just how much this democracy in particular has delivered if one looks at the last seventy-five years, if one looks at improved living standards, dramatic increases—lifespans have gotten much longer. People forget how much social stability we’ve brought, the rule of law, you know, all—how we’ve acted in the world and won the Cold War. It stayed cold and on terms that were very consistent with our interest. I think it’s important to point out the flaws of other systems, of authoritarian systems, to remind people that rights—freedom of speech, freedom of expression, freedom of religion—are not somehow—they may be God given but they’re not always man recognized and we shouldn’t take them for granted. A large chunk of the people in the world don’t have what we would consider to be basic rights and freedoms. I also think we need to remind people that for all of our flaws we’ve had enormous change. Think about the Fourteenth Amendment. Think about civil rights legislation, more recently about extending the vote to eighteen-year-olds, decades before to women, gay marriage. Yes, democracy—this one has flaws. But what we’ve seen is a recurring ability to correct, to get closer to our—to bring reality closer to our ideals and it’s one of the reasons in the book and elsewhere I’ve become a real evangelist for studying civics. You know, people aren’t born understanding our narrative. They’re not born understanding why democracy is preferable to the alternatives. I know Mr. Churchill’s comments the worst form of government except for all the others. Well, the perspective—again, people aren’t born with perspective. You either get perspective from what you experience or from what you’re exposed to and for younger people they’ve got to be exposed to it, hence my emphasis on teaching civics because otherwise they’re not going to understand the narrative. PORAT: And that’s exactly where I want to go. I thought, in particular, your emphasis on the obligation of the book, including being informed and getting involved, and you said that, you know, how critical this as you just so beautifully articulated. So how are younger people to be instructed and taught about democracy and policy? What does that actually in specific terms mean to you? HAASS: I think it’s got a couple of parts. One is I would make it mandatory. I do not believe you should get out of middle school, much less high school, without a grounding. I don’t believe you should be able to graduate from a college or university without it. You’re heavily involved with a certain local university where you live, with Stanford. I am thrilled that Stanford made the decision that starting next year all seventeen hundred freshmen are going to be required to take a module in civics. I think that is an extraordinary institutional commitment and all I can say is I hope it spreads. I think, you know, the fact that one of the world’s greatest—you would probably say the greatest—university is doing this. I’m hoping it catches on. But I think it’s a really impressive commitment. But I want every college and university to figure out a way to do this and every high school to do it. I understand this begs the question of what it is we teach, and at the risk of getting ahead of ourselves I will probably make that a big chunk of my work when I think about future years beyond the Council. I want to, essentially, next develop what I believe would be an adequate or fair curriculum that would give people the basics of our history, the basics of our democracy, some understanding about how this system works, some appreciation, as I wrote in this book, about what citizens should be expected and called upon to do. I have no illusions about how difficult it will be to get that adopted, looking at how political our debates have become about education on many things. I’m not naïve. But we’ve got to get going in this area. And I’d say one other thing, Ruth, which is in addition to the civics we’ve also got to teach people how to live in an age, how to navigate in an age, in which we’re bombarded with stuff, to use the technical word, with information, a big chunk of which isn’t necessarily accurate or factual. And New Jersey, just to cite one state, became the first state in the union—Governor Murphy signed into law a requirement that New Jersey public schools teach information literacy. Essentially, the idea is not to teach people what to think but it’s to teach students how to become critical consumers of information, how to recognize what’s a fact but also how to distinguish between facts and other things that may be masquerading as them, where to go for that. I know your associates at Jigsaw put out this—you know, the new term of art is prebunking as opposed to debunking. How do you get ahead of this? How do you teach people almost to be suspicious—to be properly suspicious of stuff so, again, they can be more discerning and they can protect themselves? You know, there’s only so much, I think, and Supreme Court this week—Tuesday and Wednesday—heard oral arguments on a subject near and dear to your collective hearts at Google about Section 230 of the 1996 Act, which set the rules, if you will, for the internet. My own view is there’s going to be a limit to what the courts and what Congress can do here in coming to terms with who’s responsible for content. Well, part of it is going to have to be consumers. Before we post things, when we read things, how do we—again, how do we discern. How can we become more careful consumers of information. So I think this is an essential part now of being a citizen. I want citizens to be involved, yes, and the fact that more than half of eligible voters didn’t vote in the midterms is the kind of thing that drives me crazy. But, to borrow from Ronald Reagan, I don’t just want patriotism, I want informed patriotism. We want people to get involved but under their belts we want them to be knowledgeable. I want them to be acting on accurate information and that’s, again, where we’ve got to make a commitment as a society to become better informed. PORAT: And you also wrote that you want them to be involved more in public service. I’m troubled by the stat that only 7 percent of permanent full-time federal employees are younger than thirty. So how would you advise the government—what would you advise the government to do to really bring in more young people and inspire more young people to want to serve, as you did throughout your career? HAASS: I worry about that. When I came of age it didn’t occur to me to do anything else. You know, I got my academic degrees and very quickly I said, this is not right. I want to get involved and when I was still in my—I already work twice in government in my twenties. I worked on the Hill and then I worked at the Pentagon. Apropos of our times, I actually worked in Jimmy Carter’s Pentagon. So it was, you know, to me really—and it just never occurred to me to do anything else. I worry that a lot of talented young people are not going to make those choices. They see government. It looks distasteful. It looks dysfunctional. So part of it is, again, one of the reasons I wrote this book is I’m hoping that if more obligations are embraced that government will get more done, will become more attractive so more of the best and brightest will want to do it. I also think there’s things we can do to incentivize government service. I wish the president had not done unconditional loan forgiveness for student loans. I wish he had done conditional loan forgiveness for people who do do national service of one sort or another. You know, we’re going to talk about what businesses can do. Well, as you know, universities give professors two years leaves of absence if they want to go work at the National Security Council or on the Commerce Department or what have you. I would love to see businesses have more flexible policies so if people wanted to go off and have a couple years in government they could do so and know that they could come back to something; they weren’t putting their financial stability at risk. So I think there’s lots of things we can do. I also think, again, the teaching of civics in schools would, hopefully, inspire some people to say, hey, I want to be a part of that. I’d like to dedicate some of my life to working in government. PORAT: Let’s shift to that, to the role of corporate leaders given in particular our audience tonight. Why is that important for business leaders? What actions can they take? And you’ve been very clear that corporate leaders must play a key role here both in the book and then in your recent op-ed. And it’s actually not just the right thing to do to support our democracy, but it’s also in our self-interest. So let’s start with what you consider to be the top things you’d like to see from corporate leaders, recognizing that for many, and particularly in the last number of years, the perception is that it’s bad for business to become too involved in politics or to take firm stands. So what are the top things? What do you say to this group, this august group, on the call today? HAASS: Let me make the case for it. I mean, corporations are being pressed to do things on ESG or DEI. So the idea that the corporate world can’t somehow operate in a splendid isolation from things political I think that’s pretty established, and whether its employees or investors, consumers—there’s pressures on corporations, whether it’s CEOs or anybody else, on certain public-facing issues. That said, I am not calling for corporations to take stances on every policy issue of our time. I think that would be a mistake. They’re not necessarily qualified to do it. It’s not why they exist. They would alienate some. So but I do think they have a massive stake in democracy. Think about just the rule of law. One of the great advantages of being a corporation in this country is you can count on the rule of law and that means, among other things—and stability. I spent three years as the U.S. envoy to Northern Ireland. We’re about to mark the twenty-fifth anniversary next month of the Good Friday Agreement. Well, think about what preceded the Good Friday Agreement. It was three decades of the troubles. Thousands and thousands of people lost their lives. It wrecked the economy. Among other things, it wrecked the economy of Northern Ireland. Well, what January 6 tells me is that could happen here. Why do we think that’s a one-off event? Just think about how different it would be to conduct business in a world where you had to worry about everyone showing up to work, maybe being—or not being able to show up at work because it was too dangerous to drive through the streets or consumers couldn’t shop. Think about what a tax that would be on our business, or think about—again, if you’re a business if the organs of government were suddenly being weaponized, if the IRS was investigating you because you contributed money to the other party, or some regulatory agency, the EPA or something, issued regulations, again, to penalize certain political behaviors or to incentivize others. So I actually think American business has an enormous stake in the rule of law, in the accountability and transparency and, essentially, the fairness even. We’re going to have a thing this—in a couple of months, and this does get a little bit closer to policy so let me admit that if—if the debt ceiling isn’t raised. I think it’s preposterous that the debt ceiling isn’t raised. As I expect everybody on the call knows, the debt ceiling is simply a mechanical reaction to previous commitments on spending and taxation. It doesn’t create new obligations. It simply comes up—it’s a mechanism for funding existing obligations. If government’s unwilling to do that corporations are going to pay an enormous price in the deterioration of the atmosphere in which they operate. So I think they got an enormous stake in democracy. What they can do, one, is they can make it a hell of a lot easier for their voters—for their employees to vote. It was interesting. You know, when I was preparing for this I looked at it. Bank of America, PayPal, any number of things—Best Buy—a lot of these places are giving employees hours or half a day or entire days off to go vote. I wish we had a national holiday here on voting day. We don’t. But in the meantime, the idea that people would get paid leave to vote. Some firms are also giving employees paid leave to work at polling stations to, essentially, be stewards of the electoral process. Some are sending all sorts of emails and reminders to say to employees, hey, the deadline for registering is, say, this September. If you want to vote this November go do it. So there’s employee education. Some are running public service announcements about similar things, voting, about registering, and all that, essentially, looking at their consumers or the larger community. So I actually think there’s lots that can be done. I noticed several people—on our board at the Council is Ken Chenault. Ken Chenault and Ken Griffin (sp) led this whole movement among CEOs to promote voting rights and, you know, I don’t see that—that’s not a policy thing. Americans should be able to stand behind voting rights. Now, I think there’s legitimate debates about voting and one of the things I do in the book is I advocate—one of my ten obligations is compromise. I think there’s a legitimate compromise where we would make it much less difficult to vote in this country, and I think we should, in exchange for which I think we also have to ensure the integrity of the vote. Well, that’s a deal I think can and should be made and the advocates of greater voting ease or rights, I believe, should contemplate accepting such a deal. So I think corporations could support that. So I think there’s lots that can be done. Travelers—there’s a whole thing about corporate citizen—the idea of citizenship and encouraging it. So, again, this is at least as important, I would say, as work on other issues and I think there’s more than, you know, businesses can and should do. Again, it’s the right thing. But as you said, it’s also in their own self-interest. It’s the smart thing. PORAT: I love your chapter on compromise, that it actually takes more courage to compromise whereas oftentimes it’s viewed as capitulation and weakness, and it was very well done. Let’s take— HAASS: Just on that—interrupt. I mean, when you read—when you reread Kennedy’s Profiles in Courage about half the profiles are of senators who stand fast against compromise but to do so would be on principle, but about half are in favor of people who compromised when compromising was the politically risky thing to do, and I love that. You know, people forget compromise was central to the Constitution. We would not have had a Constitution without compromise. We would not have had a Bill of Rights without compromise. We had a Bill of Rights because several states said, we will only ratify the new Constitution if you give us a Bill of Rights. We’re worried that this new government you’re establishing to take the place of the feckless Articles of Confederation is too strong. So the deal was, OK, you know, we will ratify in exchange for a Bill of Rights. So compromise is at the heart of this experiment of ours. I’m not quite sure when along the way it became a four-letter word. But somehow it did and I really think we’ve got to change that. PORAT: Absolutely agree. Going back to what we as corporate leaders can do, I was really also struck—you stressed the importance of focusing on addressing inequality of economic opportunity as distinct from economic inequality, and this is a point we spend a lot of time on at Google, whether through our digital skills training work or support for small businesses, and I firmly believe that to have sustainable economic growth you need to have an inclusive economy. So let’s spend a bit more time on some of the examples that you think where businesses step up and can do more and what would you like to see them doing more. You talked about voting. What else would you put on that list of to-dos that this group should take away? HAASS: There’s lots of businesses that are supportive of education. I actually think that, maybe I’m old fashioned again here, but education is the great ladder in this country, potentially, and it’s fine for people like me and you to talk about equal opportunity. And don’t get me wrong, equal opportunity is essential. But it can’t just be in principle. It’s got to be real. And so if it turns out that, yes, everybody goes to school but the schools are wildly uneven in quality then, yeah, you have equal opportunity in principle but you don’t really have it in practice. So where corporations can contribute to schools or with after-school programs so not just wealthy kids have access to tutors or to supplementary kind of work. Not every parent’s in a position, given their own work schedules or their own educational backgrounds, to be a tutor, and so forth. So I think there can be a leveling of the playing field. So I think corporations in their philanthropic sense can do—you know, can do a lot of good in that area. Just scholarships could be something that corporations can do for workers to make it less difficult, again, for kids to have access to certain kinds of school. Again, I think—I’m a great believer in what I would call equal opportunity as opposed to insisting on equal outcomes. I think the latter is, if you will, I think it’s misguided and I think in some ways it’s un-American. And so in that sense, I’m a classic liberal. I’m not a modern or a progressive. But we’ve got to make sure then that equal opportunity is not just a slogan, that it is a reality. So I think that’s—I really think that’s essential. PORAT: Excellent. Now, obviously, the book focuses on what we need to do domestically. But given you’re such an expert on foreign policy, how do you see the actions in the book as critical to America’s foreign policy and presence on the world stage? HAASS: In a couple of ways. One is if we want to see more democracies in the world, and I assume we do, we tend to believe that democracies are good in and of themselves, to use the academic word for normative reasons, that we think they’re just—it’s better for the human experience. But we also think mature democracies make better international citizens in terms of not waging war against other democracies. The best way we can do it that I know is by setting an example. You know, it’s not by invading countries. It’s not by preaching at them. It’s by showing that American democracy delivers rights, freedoms, but also economically, social opportunity. The best single advertisement for democracy is, again, to borrow from Ronald Reagan, is, you know, that we are for real a shining city on a hill. People will notice that and I would love for people around the world to say, hey, why can’t we be more like them. We kind of like what they’re able to give to their—that’s one thing. Second of all, if we’re divided here at home politically we’re not going to have the resources we need. Right now, for example, we are millions of workers short of what we need in this country. Why? Because we can’t agree on an immigration policy. I already mentioned the debt ceiling. If we don’t come together on that, whatever economic problems we have today are going to, you know, be dwarfed by the economic problems we’re going to have the day after that. So our entire resource base depends upon our ability to come to together. Then there’s the question of unpredictability. If we’re divided and distracted at home my guess is that our foes are going to take advantage of it. I can’t prove it but I would guess one reason Vladimir Putin a year ago marched into Ukraine is he thought the United States post January 6 and the rest was simply too divided to come together to do much about it. I also think—and I travel all the time, as you’d expect in this job—I know from more conversations that I’m comfortable recalling that our friends are—a generous word would be uneasy about what they see. What this has done is our divisions have raised into question whether they can count on us and I can’t think of a quicker way to reduce American influence in the world or to see a world that begins to spin out of control than a world where countries that are in alliances with us basically say, hey, we really can’t count on the Americans. We need to build our own nuclear weapons or cut deals with a strong neighbor or whatever. So I actually think that what happens here turns out to be a really important national security issue not just for homegrown reasons but for foreign policy reasons. PORAT: Recognizing that there are no quick fixes what’s in store for the American democracy and how is it going to keep the world safe? HAASS: Well, you know, I’m not in the predictive game because my predictions aren’t worth anything more than anybody else’s. So I’m in the nothing is inevitable game. I really feel that, that when I look at the future, yeah, I’m worried. But I actually think worry can be a pretty good motivator. When I get worried about stuff it doesn’t immobilize me but it kind of lights a fire under me. I want to do something about it. And, you know, and the reaction to my book—let me be slightly self-referential for a second, which you would say is not an exception—but it’s had—it’s gaining real traction. It’s not just that it’s selling well. I’ve got more—how to call it—retail responses to this book than anything I’ve ever written before, and I’ve done a lot of books. I’ve gotten more letters and emails and people stopping me say, hey, thank you for writing this. I’ve done town halls—a town hall upstate New York about two weeks ago, and maybe seventy-five—I don’t know—you know, these weren’t CFR members. These were people—the local plumber, the local electrician, the local librarian, the local schoolteacher—and what they all sense is there’s something amiss in this country. There’s something wrong and they’re worried about the future, not so much for themselves but for their children and grandchildren. So I think there’s a ripeness. There’s a sense that we’ve got to—we better act. It’s not necessarily—we can’t assume it’s going to sort itself out by itself. You know, it’s not going to fix itself automatically. And, again, it’s, you know, this—I’ve already had several members of Congress reach out to me about national service, about things we can do to incentivize national service. Bipartisan support for that. I’ve had enormous outpouring from governors and others about doing more things to promote civics. I’ve talked to people not just at Stanford but I’ve talked to about a half dozen other universities about institutionalizing a civics course or curriculum there. So my own sense is the time is right to do some of this. So some of the things, you know, are more—I’m hoping—I’ll be talking to religious leaders. I’ve already started that. I spoke to a lot of Catholic leaders the other day about I think they have a special responsibility to do things like delegitimizing political violence, about urging people to compromise, about urging people to care about their fellow citizens. You know, there’s all this scripture about being one’s brother’s or sister’s keeper. Well, why aren’t—religious leaders can address that without saying you’ve got to take this or that stance on this issue and that they have moral authority. Teachers have authority. Journalists have responsibilities to explain issues. Parents have responsibilities to model certain behaviors or explain things. So there’s—a lot can happen. You know, I’m going to emphasize I think the national service and above all civics and information literacy things. That’s where I’m going to put my calories. But yeah, I think the time is right to make some breakthroughs here. PORAT: So, with that, a huge thanks to you, Richard—I’ll use your term—for making yourself a target, for your thought leadership here and really continuing to press this very important topic. And thanks to everyone who joined today. Have a wonderful day. Great to be with you. HAASS: Thank you, all. Thank you, Ruth. Thank you all for being part of us. (END)

Panelists discuss the role of the private sector in promoting social responsibility, development, and change at scale around the world. The CFR Young Professionals Briefing Series provides an opportunity for those early in their careers to engage with CFR. The briefings feature remarks by experts on critical global issues and lessons learned in their careers. These events are intended for individuals who have completed their undergraduate studies and have not yet reached the age of thirty to be eligible for CFR term membership.

The 2022 Stephen C. Freidheim Symposium on Global Economics discusses building an inclusive U.S. economy and reforming capitalism to address inequality. The full agenda is available here. This symposium is presented by the Maurice R. Greenberg Center for Geoeconomic Studies and is made possible through the generous support of Council Board member Stephen C. Freidheim.

Panelists discuss how companies can focus on long-term value creation while meeting shareholder expectations for quarterly profit, whether capitalism should be reformed to encourage companies to ensure durable growth and sustainable investment, and how companies can plan and invest for the long-term while managing short-term pressures.  

Doug Peterson discusses corporate leadership, environmental, social, and governance criteria for investing, and S&P Global's role in the world. The CEO Speaker Series is a unique forum for leading global CEOs to share their insights on issues at the center of commerce and foreign policy, and to discuss the changing role of business globally.