How to Fight the Politicization of Business
Editor's note: The following piece, co-written by Jeremy Tedesco and David L. Bahnsen, originally appeared at National Review.
Everything is becoming politicized, including your access to financial services. That’s not just bad for business, but for civil liberties too.
Activists are seeking to politicize business to advance specific political viewpoints and causes. Often marching under innocuous-sounding banners like “environmental, social, and governance” (ESG), and “diversity, equity, and inclusion” (DEI), this agenda includes pressure from activist shareholders, external advocacy groups, and regulators to de-bank certain groups and individuals whose industries or views they dislike.
JPMorgan Chase appears to be caving to the pressure, and people are noticing. Earlier this spring, 19 state attorneys general and 14 state financial officers sent letters to Chase raising significant religious-discrimination and fiduciary-duty concerns over its recent spate of decisions to de-bank people and groups for what appear to be viewpoint-based reasons.
So how do those who want to see liberty and virtue flourish in the marketplace fight back?
First, we must cast a positive vision for a business culture that respects liberty and cultivates virtue. Alliance Defending Freedom has done that through the Viewpoint Diversity Score Business Index. The index’s 42 benchmarks and suite of model policies are a road map for ending viewpoint-based corporate cancellations, discrimination against employees because of their religious and social beliefs, and corporate politicking that damages religious freedom and free speech.
This year, Chase scored just 9 percent on the Business Index. With Chase earning such a low score on respecting religious and viewpoint diversity, it should come as no surprise that politicized de-banking appears to be on the rise at the company.
The second thing we must do is hold companies accountable. This year, I (David) submitted a shareholder resolution for inclusion on Chase’s proxy statement raising concerns over the rise in politicized de-banking and asking Chase to conduct an audit of its impact on customers’ civil liberties.
I informed Chase that I would consider withdrawing the resolution if it demonstrated transparency by completing the survey portion of ADF’s Business Index, but it declined. Instead, Chase asked the SEC to block my resolution — an effort that thankfully failed. All I am asking is that Chase look into these de-banking claims. Chase says it did nothing wrong. If that is the case, then Chase should be transparent because it has nothing to hide. Chase’s efforts to evade transparency belie the denials of wrongdoing.
Our program for business, unlike that of ESG activists’, is not censorial. We are not fighting fire with fire. We are not harming the company and other shareholders by demanding that Chase de-bank those with whom we disagree.
Rather, we expect Chase and other companies to treat customers, employees, and vendors ethically, with dignity and fairness, and within the bounds of the law. Politicization of business does the opposite. Denying essential financial services to persons or businesses based on their speech, religion, association, or participation in a politically disfavored industry chills the exercise of speech and religion and deters individuals from participating in the democratic process.
Politicization of business also harms companies and shareholders. It distracts companies from fulfilling their core purpose — creating excellent products and services that generate consistent profits and contribute to human flourishing. It harms shareholders by taking away legitimate business. It propels companies into contentious political issues fraught with brand and reputation risk (just ask Bud Light). And it drives out talented employees who are unwilling to bend the knee to progressive ideology.
It’s fair to say that as goes JPMorgan Chase — America’s largest bank — so goes the rest of the banking industry. We stand on the cusp of banks becoming tools of censorship, as has already occurred with several leading social-media companies. We must avoid this in the financial-services industry, and JPMorgan Chase has a chance to lead the way. But first things first, JPMorgan Chase must meaningfully engage with its own shareholders and others who — unlike anti-business activists — have a shared interest in seeing the financial institution succeed.
