Business Has Failed, Says Henry Jackman
January 1, 1992 -
When Henry Jackman, then a spokesman of the business elite and now the Honourable Lieutenant-Governor of Ontario, gave the commencement address at the University of Windsor last summer, he had some harsh things to say about the shortcomings of business leaders in this country.
It is refreshing that a prominent representative of the Canadian establishment dared to criticize and point out its serious shortcomings. If improvements are to be made to our current deplorable state of labour relations, business people need to provide leadership. After all, they are in the driver's seat; they are in a position to map out a new course for managing their businesses.
At this time of recession it is well to remember that a business requires the best efforts of labour and management. As long as the two treat each other as adversaries, the house of business is divided and cannot stand. What is desperately needed is a new sense of partnership between both sides. A good place to start is with self-criticism and the admission of past mistakes. This is why Jackman's speech deserves a respectful hearing.
Jackman began by contrasting the present with the time he graduated from university, some 38 years ago. The immediate post-war period was a time of optimism and heady expectations. Industry was booming and promised to deliver prosperity. There was political stability and a confidence that the potential of this country was unlimited.
All of that has changed. We are, Jackman reminded his audience, suffering from a "malaise" that has crept across the land.
The nation is beset with stresses. We are even now being forced to pause and rethink our justification for our existence as a country. Confidence in our political leadership is at a low-disenchantment with Canada is leading parts of our country to question where true sovereignty rests.
"An Orgy of Self-gratification"
We are burdened by a very large public debt load, which makes it very difficult for governments to act. Many blame governments for the problems we now face, but Jackman believes that business should not be let off too lightly. He blames them for failing in their responsibilities when they pursue "selfish and shortsighted aims at the expense of long term growth and industrial stability."
While public debt has grown phenomenally, something that business people perpetually complain about, Jackman says that private corporate debt has grown even faster. He continues:
What is tragic about the mortgaging of corporate Canada is that too little of this increased debt resulted in any net increase in productive investment. Where are the new factories? The new jobs or the new industries in this country? The vision that motivated the business leaders in the 1950s seems to have been lost.
Jackman blames business leaders for using resources for takeovers, leveraged buyouts, and building corporate empires at the expense of the tax system. While the business world was indulging in what Jackman describes as "an orgy of self-gratification," industrial plants deteriorated. Restructuring to compete in global markets was neglected and so was the necessary research and development, as well as concerns for environmental issues. Standards of conduct deteriorated. While companies fared badly, chief executives paid themselves extravagant salaries. He mentions that compensation for chief executive officers of North American companies skyrocketed 212 per cent during the 1980s while compensation for factory workers rose 53 per cent.
It is against this dismal background that Jackman tells his audience, the prospective future leaders, "business can only survive if it remembers that its historic purpose is not to look after the few but to provide a better living for the entire community, thus making all of us proud of what Canadian enterprise and creativity can accomplish."
At a time when public cynicism about business, labour, and government is widespread and pessimism abounds, it is heartening that there are still some who call for critical self-evaluation. Jackman's reminder to business leaders that they have a responsibility to the entire community needs to be spread widely, not only in the business world, but in trade union circles as well. It would be especially gratifying to see both business and labour engaging in serious self-examination, while at the same time developing an open, cooperative, and trustful way of working together. That would truly be a giant step in the right direction.