Westmont Magazine The Corporate Conscience

A new book by David Batstone ’80 has attracted a lot of attention even though it won’t be published until April. “Saving the Corporate Soul and (Who Knows) Maybe Your Own,” addresses a timely topic: how businesses can pursue both integrity and profitability. A professor social ethics at the University of San Francisco, David has become a leading voice on business ethics. The cover story of the Feb. 23 issue of USA Weekend featured his solutions to a variety of ethical dilemmas.

Inspired by corporate scandals such as Enron and WorldCom, the book presents an alternative way of doing business. Instead of evaluating what the companies did wrong, David looks at what they failed to do right. He lists eight principles essential for corporate performance and uses real-life examples from 40 firms with ethical — and profitable — business practices.

The result is an uplifting book that focuses on what is good about business. While David interviewed many CEOs for the project, he also talked to mid-level managers and employees, and their perspectives are included as well. In fact, David believes that no matter what your position is, you can make a difference in your company.

“I became troubled by corporate greed and self-interest,” he says. “Unethical behavior drags down a company. I saw it as a business operations issue as much as a moral issue. Values make the company.”

David considers the corporate crisis as much spiritual as it is financial. “Capitalizing on innovation is not enough today. A company’s success also hinges on whether in the eyes of its employees and the public it honors a common sense of justice.”

Statistics bolster David’s argument. “Workers are six times more likely to stay in their jobs when they believe their company acts with integrity,” he writes. Social values have shifted, and corporations need to take note. Workers want to see corporations “act with soul.”

How can companies do this? “A corporation has the potential to act with soul when it puts its resources at the service of the people it employs and the public it serves,” David states. “That journey begins once a company seeks to align its mission with the values of its workers.”

Throughout the book, David introduces companies and individuals who have successfully implemented his principles. These stories provide an important human dimension to his thesis. While the accounts celebrate achievement, they also present the complexities of the corporate world and the hard work involved in being both profitable and principled.

The first chapter in the book addresses the actions of business leaders. “Shareholders today are troubled not only with the executive who commits a criminal act, but also the one who puts personal gain ahead of the company’s welfare,” David notes. “Perhaps the most galling part of recent corporate scandals is the contrast between the fortunes made by executives and the ultimate fate of their companies.”

People want to trust leaders but find it increasingly difficult to do so. To remedy this crisis David rolls out a blueprint for “remodeling the executive office.” His solutions include adopting a more equitable compensation structure, reforming stock options and ending executive loans.

David challenges boards to take a more active role in corporate life to check the power of executives. “It is the board’s duty to ensure that the best interests of all stakeholders are honored,” he writes. Corruption and deception don’t happen overnight; they are bred over time. More vigilant directors may prevent that decay.

A telling sign of integrity is transparency, “the hallmark of a consistent enterprise,” David says. “Firms that present truthful information, operate openly, and stand behind their word make our risks feel calculated.” He encourages firms to cultivate transparency in their culture, management, financials and commitments.

One of the most powerful chapters in the book calls corporations to place greater value on workers. “We now have the opportunity to enter a new era in the owner-worker relationship,” David says. “Workers up and down the corporate ladder aspire to be partners in the enterprise. Once they are treated like valuable team members, they start to view their own personal success as part and parcel with the company’s success.” The hero here is Malden Mills CEO Aaron Feuerstein, who kept his employees on the payroll even after a fire destroyed much of his plant.

Throughout the book, David shares some of his own experiences with the business world. His career path has been unconventional. After majoring in psychology at Westmont, he earned a master of divinity degree at Pacific School of Theology and a doctorate in theology and ethics at Graduate Theological Union.

Concern for the poor and an interest in liberation theology (the subject of an earlier book) led David to El Salvador in 1984. Seeing the military’s oppression of Christians inspired him to co-found Central American Missions Partners,which he headed for 10 years. CAMP sought to raise awareness among U.S. evangelicals of the poverty, social injustice and religious persecution threatening Central Americans.

Through CAMP, David worked to develop sustainable economies for villages, using seed capital. He learned about the financing, budgeting and operations needed to make an endeavor work, and he grew to appreciate the entrepreneurial enterprise. After he left CAMP, David joined the faculty at the University of San Francisco in 1995 to teach social ethics.

When the Internet took off, David became interested in the impact of technology on businesses and organizations. He began writing cover stories for business publications such as Wired magazine, and he contributed articles to the Chicago Tribune and The New York Times. Thanks to this work, he was recruited to start and edit Business 2.0 magazine.

“I like to describe it as Fortune magazine meets Wired,” he says. The publication won an award for best new magazine its first year and AOL Time Warner eventually acquired it.

“As I got to know more people in the venture investment community, I realized that my work with peasants in Latin America was similar to running a company,” he explains. “I love being around entrepreneurs. They think outside the box, take risks and don’t stay down for long. They are creative people and eternal optimists. I decided to stop writing about them and join them instead.”

Through Netcatalyst, an investment banking company, David advised companies on investments, mergers and acquisitions. Meanwhile, he continued to teach full time.

“I bring everything I do into the classroom,” he explains. “Students enjoy the exposure to the real-world aspects of the global economy.”

While David no longer edits Business 2.0, he serves as executive editor of Sojourners magazine. “I’m still involved in telling the story of the poor here and in the Third World,” he says. “I will turn back to that subject in my next book. The politics surrounding economic development in the Third World are too polarized; we need a fresh set of ideas. I’m interested in a pragmatic take on addressing world poverty.”

David first saw compassion combined with a passion for economics in the life of his favorite Westmont professor, the late Lou Kuipers. “Learning as a way of being is something I got from my liberal arts education at Westmont,” he says.

David hopes his book encourages corporate employees at all levels to practice ethics and become a source of inspiration for others. By doing so, they can make a difference — and help their business thrive.