Tom Lyon’s book on corporate political responsibility helps to ‘unrig’ the system

Many Americans believe business has too much influence in politics, says Erb faculty member Tom Lyon, the Dow Chair of Sustainable Science, Technology and Commerce. “If you look at certain sectors—the financial sector, the health care sector, the energy sector—we do things that aren’t really best for society, but they’re best for some of the companies in those industries,” he says. 

“I think we’ve become more and more aware of that as a problem, and it’s tearing down Americans’ trust of their own country and their government, because they feel like the game is rigged. And if we want to try to restore some trust in the system, we need to unrig it,” Lyon says.

“Unrigging” it requires corporate political responsibility. Lyon edited the recently published book Corporate Political Responsibility, which brings together leading scholars in various disciplines and leaders at organizations that have been supporting companies in adopting more responsible political practices.

The concept of companies being accountable to their stakeholders is not new, Lyon says, pointing to the Center for Political Accountability, founded in 2003 and led by President Bruce Freed. What’s more novel is the concept of corporate political responsibility (CPR) itself—”expecting companies to step up and do the right thing,” Lyon says. “I think so many of us are cynical about what companies do in the political world that we really need to turn that around.”

This responsibility might mean corporations’ responsibility to lobby in support of democracy, in support of climate policy, or in support of technological platforms that support informed and sensible public debate rather than polarization, Lyon says. But a challenge is how to define what’s responsible, because people’s views differ. So the book helps identify: Where can we find common ground?

Corporate Political Responsibility seeks to create a new norm for corporations’ responsible political behavior. It includes new evidence on what motivates firms to become more responsible and how markets view corporate “dark money” spending. The contributors also explain how activists have pressed companies to play a more responsible role in politics, and they address the role of corporate lobbying in supporting or blocking climate policy.

“The book was very much meant to draw theory and research together with practice,” Lyon says. For example, it includes chapters by Freed, William Laufer, and Karl Sandstrom on corporate accountability as a risk and governance problem; David Vogel on business and climate change; Ed Walker on what drives firms to disclose their political activity; and Elizabeth Doty on the Erb Institute’s Corporate Political Responsibility Taskforce (CPRT).

In his work with the CPRT, Lyon has noticed a surge of interest in the idea of CPR from students, legislators, think tanks, and more. “It really does feel like it’s an idea whose time has come, and it seems to inspire people to come together and try to work in support of the idea,” he says.

“It’s still very nascent, but there’s growing work looking at how corporate political responsibility efforts may affect a firm’s financial performance, or may insulate it from attacks by external stakeholders, or may allow a firm to motivate and mobilize its employees. And some of the chapters in the book provide new evidence on how that can happen,” Lyon says.

The book is especially important now because “we have a lot of threats to democracy, writ large, and some of those come from years and years of pressures that have been building, and distrust. But we have a more active set of people who are willing to undermine democracy than we’ve probably ever had, so we’re at a particularly fragile moment, and we really need business to step up as a responsible player,” Lyon says.

The intended audience includes people in academia, think tanks, government agencies, and government affairs in companies. “I hope people will read it to see—what are activists doing in practice? And also, what is the underlying research and intellectual capital we need to make this idea really come alive?”

Lyon says he hopes the book helps the idea of CPR to take root in people’s minds, and to become “something that citizens expect, that they ask for, that they demand from companies.”