Crises make reputations — or destroy them. One of the lasting outcomes of the 2008 financial crisis was the casting of the world’s bankers as villains for their part in the collapse of the banking system. Today’s health pandemic is of a different magnitude, and big business is not at fault. What matters, though, is capitalism’s response to the crisis. Companies will be split into two camps: those who treated staff and others well, and those who tried to take advantage.
Before the coronavirus gripped economies, business leaders had promised to espouse a new, more caring type of capitalism. The Business Roundtable, a body that represents chief executives of some of America’s largest companies, said last year that it would drop the “shareholder first” creed that has driven capitalism for the past five decades. Instead, companies should take into account other stakeholders. No one could have foreseen today’s devastating health and financial emergency, but if business leaders do not step up now, then the question surely must be: will they ever?
It is early days and many businesses have already stepped up, offering affected employees sick pay. Some CEOs have agreed to cut their pay. Some villains have also emerged. In the UK, Tim Martin, founder of pubs chain JD Wetherspoon, and Mike Ashley, owner of Sports Direct, have come under fire for trying to keep their respective businesses open. Mr Ashley issued an uncharacteristic apology on Friday, conceding that his stance had been “ill-judged”. But it was a mea culpa that will not have done much to restore the company’s reputation, with Mr Ashley appearing to blame the media as much as himself. US drugmaker Gilead was also forced into a U-turn, waiving all benefits of the “orphan drug” status for a potential coronavirus treatment after a fierce backlash.