Last Friday, the New York Times ran two opinion articles about the role of the CEO in today’s society. The first, CEOs Are Qualified to Make Profits, Not Lead Society, was written by a Harvard economics professor, N. Gregory Mankiw. In it, Mankiw argues that, never mind what the Business Roundtable thinks about business’s responsibility to all stakeholders, the CEO should stick to profit-maximization. His rationale? CEOs simply aren’t smart enough to do good.

And there’s the rub. Mankiw acknowledges that the U.S. hasn’t seen that leadership in the last four years under President Trump, and yet offers no solution but to vote for Joe Biden in the 2020 election.

The second NYT piece, Meet the New C.D.C. Director: Walmart, details how Walmart CEO Doug McMillon, (who is not coincidentally the new chairman of the Business Roundtable), together with the CEOs of Starbucks, Kohl’s, CVS, Walgreens, Publix and Target, among others, have made wearing a mask mandatory in their stores across the U.S., doing what the U.S. federal government has not. There is no doubt in my mind that their leadership will help save lives.

CEOs have been filling the gaps they see in government leadership, speaking out and taking action in the U.S. on LGBTQ rights, immigration policy, gun control, and access to abortion. Mankiw argues that it’s not clear how to motivate CEOs to act in the public interest. Yet they are acting: they are acting when their own views and those of their employees are not being represented by elected officials. They are acting because their employees and customers expect them to use their influence for good. And they are unwilling to wait and cross their fingers for the next election.

The U.S. under President Trump is in a unique situation, and it’s not a coincidence that CEO activism really took hold there in 2016. To suggest that everyone should just sit tight between elections if government doesn’t represent your views, is at once naïve and undemocratic. In the face of a pandemic, waiting for November is simply deadly. No matter the results of the 2020 election, the need for CEOs to look beyond the income statement will remain.

CEOs cannot and should not replace the role that elected officials play, but CEO can complement the roles of politicians and not-for-profit leaders in advancing the public good. Here are five reasons why.

1. Elected officials are not experts on every issue that crosses their desks, nor are they expected to be. Mankiw’s assertion that elected representatives are experts on social good while CEOs are not is a bit bewildering. Both types of leaders have among them exceptional and disappointing examples.


2. Looking out for the social good is not any one group’s job. It’s everyone’s job. Effective collaboration between government, business and not-for-profits is critical on issues from addressing racism to gender and LGBTQ rights to climate change, if for no other reason that many of our social ills created by business. If you want to fix anti-Black systemic racism, CEOs have to be part of the answer, and they are heeding the call. Moreover, issues like climate change, and even recently, as we’ve seen, a pandemic, are too big for government to address alone.


3. CEOs have the means to effect change across political boundaries. Issues that would require legislative responses across 50 states or 10 provinces and three territories can often be effectively addressed when companies simply change their own behaviour, not just in one country, but internationally. Think mandatory masks or plastic straws. A few leaders give other CEOs air cover to follow suit, and within days you can have a critical mass to effect change.


4. Business can move faster than government. Because CEOs can act unilaterally, they sidestep a slow and partisan political process. Yes, this can also be abused. Shareholders, boards of directors, government, employees, customers and media serve as a (yes, imperfect) check on power abuses. Government is also prone to abuse of power, as we have seen clearly in recent years.


5. CEO activism, or more simply, having a social conscience, is not in direct conflict with shareholder value. Milton Friedman’s 1970 seminal essay for the NYT on this issue has been soundly rebutted many times since then, and Mankiw’s piece, which somehow doesn’t even mention Friedman, does no better. CEOs who fight for the common good are more trusted by employees, customers, and the public, which in turn improves retention and recruitment, builds brand loyalty, and adds value to corporate reputation and builds shareholder value. Even shareholders are now pressuring companies to do what is right.

The idea that CEOs aren’t qualified to do good is also a denial of the good that CEOs have already done, using their power beyond the limits of their business needs. Dan Schulman, CEO of PayPal, is just one living, breathing example. You can absolutely argue that CEOs are unelected and that they have shown themselves to be criminal and greedy. But that people exercise their approval for and against CEOs every day in where they shop, where they work and what stocks they buy. They contribute a valuable, different and needed strain of leadership to the public interest.