When Data is a Source of Wealth

Some of the most intriguing issues of corporate social responsibility which, moreover, implicate millions of lives are bound up in social media platforms.  These platforms have generated vast wealth in terms of share values and salaries paid to employees and yet, their business practices, not to say their services, are controversial with many.

Our colleague, Shirley Boyd, has keenly analyzed some less well-examined aspects of who should use what data derived from users of social platforms. You can read her commentary here.

Shirley is a retired VP and Associate General Counsel of Cargill and now teaches a class on ethics and legal compliance at the University of Minnesota.

We welcome Shirley to our community of those concerned for a moral capitalism.

What Has Gone Wrong When Children Are Anxious All the Time?

So, President Putin has invaded Ukraine.  In the U.S., with its increasingly therapeutic culture, there is a new recommendation to screen children for anxiety and depression.

Now, Putin’s “special operations mission” did not cause American children to lose their grip on self-confidence and optimism, but something did.  What does that say about Americans and their moral orientations over the past 30 years?

How does one build a moral capitalism where, today, tomorrow’s leaders are anxiously self-absorbed?

Here is the report from the Wall Street Journal:

Children as Young as 8 Should Be Screened for Anxiety, Experts Recommend

Draft guidance underscores pandemic’s toll on adolescent mental health

By Brianna Abbott
Apr. 12, 2022

All children should be screened for anxiety starting as young as 8 years old, government-backed experts recommended, providing fresh guidance as doctors and parents warn of a worsening mental-health crisis among young people in the pandemic’s wake.

The draft guidance marks the first time the U.S. Preventive Services Task Force has made a recommendation on screening children and adolescents for anxiety.  The task force, a panel of independent, volunteer experts that makes recommendations on matters such as screening for diabetes and cancer, also reiterated on Tuesday its 2016 guidance that children between ages 12 and 18 years old should be screened for major depressive disorder.

More than one-in-three high-school students reported experiencing poor mental health during the pandemic through June 2021, according to a Centers for Disease Control and Prevention survey of more than 7,700 students.  About 44% said they had persistent feelings of sadness or hopelessness within the 12 months before the survey.

A survey of primary-care physicians found that 76% believe in the importance of talking to adolescent patients about mental health but that only 46% said that they always brought it up with their patients, the task force said.

Screening children for anxiety and other mental-health disorders is often done through questionnaires for patients or parents, often at regular checkups.  Some hospitals or medical centers also screen pediatric patients that come into the emergency room.  Mental-health and pediatric experts said the benefits of screening include flagging mental-health risks in children who might not exhibit symptoms or whose symptoms overlap with other conditions.

“Not only does that open the opportunity for interventions for the children, but it enables the parents to learn skills and strategies to respond to their kids’ anxiety that can be helpful in the long term,” said R. Meredith Elkins, director of the McLean Anxiety Mastery Program at McLean Hospital in Belmont, Mass., who isn’t a member of the task force.

Panelists who drafted the new mental-health screening recommendations reviewed 78 studies related to screening and treatment for anxiety, depression and suicide risk.  None directly compared the effectiveness of screening with the effect of no screening.  Instead, panelists analyzed the accuracy of screening tests as well as potential benefits and harms of treatment.

There wasn’t enough evidence to make a recommendation for or against screening for suicide risk among asymptomatic adolescents, a leading cause of death in the age group, the task force said.

In the CDC report on youth mental health in the pandemic, about 20% of surveyed high-school students said that they had seriously considered attempting suicide in the 12 months before the survey.

When We Are Perplexed, How Can We Lead?

Our Chair Emeritus, Lord Daniel Brennan, just spoke to me about the impact of our times on bringing into question the optimism necessary for a work such as that attempted by the Caux Round Table.  He suggested making a statement incorporating many wisdom traditions to the point of having faith and, from faith, being courageous.  Here are my thoughts for your reflection.

A New Approach to Intentional Re-balancing of Wealth Inequality

No doubt responding to concerns over the growing inequality of wealth between the top 1% and 10% of families and the far greater number of “other” families, the Biden administration is proposing an innovation in taxation.

The proposal is to tax accumulated wealth directly, not income earned.

The proposed wealth tax is cast as a minimum tax which would assess 20% of the combined income and the increase in value of assets of households worth more than $100 million, some 20,000 households in the U.S.

The tax on unrealized gains of financial holdings and imputed to closely held businesses would bring to the government a share of increasing prosperity reflected in rising prices of equity stocks (and perhaps other financial assets).  So, if speculation and trading push nominal stock prices up, the owners of such shares, even if they don’t sell their shares, would pay money to the government.

Similarly, if the economy grows and private companies become more profitable, an imputed new capital value for the company would be determined and a tax in real money would be paid based on that imputed value.

The proposal has its complexities and would generate more money for governments during times of inflation, when real values are constant or falling.  But the proposal focuses attention on the moral question of what do very wealthy people owe to the society which permits them to so thrive.

Please Join Us for the Presentation of the 2021 Dayton Awards – Friday, May 6

The Caux Round Table for Moral Capitalism will present its 2021 Dayton Awards at 8:30 am on Friday, May 6 at the Landmark Center in St. Paul and you are invited to join us. Please register here.

The 2021 Dayton Awards will be presented to Medaria Arradondo, former Chief of Police for the City of Minneapolis, and Todd Axtell, retiring Chief of Police for the City of St. Paul, for their upholding the demanding fiduciary responsibility of public office as a public trust.

The Caux Round Table’s Principles for Government affirm that:

  • Power brings responsibility. Power is a necessary moral circumstance in that it binds the actions of one to the welfare of others.
  • Therefore, the power given by public office is held in trust for the benefit of the community and its citizens. Officials are custodians only of the powers they hold. They have no personal entitlement to office or the prerogatives thereof.
  • The state is the servant and agent of higher ends. It is subordinate to society. Public power is to be exercised within a framework of moral responsibility for the welfare of others.

The Caux Round Table was founded to celebrate that legacy and promote its principles, which are universal, of social responsibility in business and public trust in government. We seek to recognize those Minnesotans who today, in this time of crisis, carry forward that legacy and those ideals – no matter what their power or position.

The event is free and will last about an hour.

Space is limited. Please register.

The Landmark Center is located at 75 West Fifth Street in downtown St. Paul.

We’ll be in room 326.

The recipient of the 2019 Dayton Award was Douglas M. Baker Jr., then CEO of Ecolab and the recipients of the 2020 Dayton Award were Andrew Cecere, CEO of USBank and Don and Sondra Samuels.

What is a Civic Business? Please Join Us at Kowalski’s Markets on April 26

Please join us for a special round table event with Mary Kowalski, owner of Kowalski’s Markets, and Kris Kowalski Christiansen, CEO of Kowalski’s Markets, at 9:30 am on Tuesday, April 26, at their headquarters in Woodbury.

Mary and Kris will discuss with us the concept of a civic business – what it is, how it works and how their employees contribute – and how other businesses can adopt this model.

Here’s a short video of Mary and Kris discussing a civic business.

Coincidentally, we will be including an article by Mary on this very issue in this month’s edition of Pegasus.

The event is free and refreshments will be served.

To register, please email Jed at jed@cauxroundtable.net.

Kowalski’s is located at 8505 Valley Creek Road in Woodbury.

The event will conclude at 11:00 am.

Stakeholder Capitalism at Work

In my classes, I like to make the point that discussion of business ethics, CSR, sustainability, stakeholder capitalism and moral capitalism are relevant to real business decision-making and profitability.

Here’s an example of this:

Howard Schultz, the founder of Starbucks – very successful and very wealthy – is returning to the company as its CEO – for the second time, his third term at the helm.  Why?  Can’t a profitable company just keep on making money?

The news report mentioned challenges in its Russian and Chinese markets and rising costs.  My guess is that it is a third challenge or rather, threat, which had brought the founder out of retirement to again revamp the business model.

This third challenge is unionization of employees.  When baristas are union members, what will happen to the quality of Starbuck’s product – not coffee, but shopping experience?

Schultz said, “I know the company must transform once again to meet a new and exciting future where all of our stakeholders mutually flourish.”

Institutional investors worry that the unionization campaign has the potential to cause reputational damage – i.e. loss of customers and pricing pressure.  They will have more confidence in the company with Schultz back at the helm and so keep its stock price up.

The lesson here is that employees are a capital asset, not just a cost.  They are social and human capital contributions to profitability and need to be appropriately compensated, tangibly and intangibly.  Starbucks needs to offer an alternative to whatever a union might offer employees, otherwise, employees will vote for a union and the company will suffer from the entropic forces so often associated with union shop stewards.

The CEO is also a human capital asset.  Unlike dollars or euros, CEOs are not fungible, one replaceable by another.

Moral capitalism is all about the conjunction of social and human capitals with financial capitals.

It takes more than money to make money.