How to run a business in a dangerous and disorderly world

CHIEF EXECUTIVES have long had to be contortionists, balancing the needs of employees, suppliers and above all shareholders while staying within the limits set by governments. But the twisting and stretching is now more fiendish than ever. The world is becoming dangerous and disorderly as governments try to manipulate corporate behaviour. Global companies and their bosses find themselves being pulled in all directions.

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Few multinationals are unscathed. As tensions between China and America ratchet up, chipmakers from Micron to Nvidia have been the target of sanctions. TikTok, a Chinese-owned short-video app, is in the sights of American lawmakers. The Biden administration’s plans to curb outbound investment will encompass private-equity giants and venture capitalists. Once-staid carmakers now find their investments in the spotlight, as countries vie to host the next electric-vehicle factory. China’s tech behemoths have been tamed by Xi Jinping. Everyone from bankers to brewers has been ensnared in America’s toxic culture wars.

All this rips up the unspoken agreement between government and business that held sway in America and much of the West after the 1970s. Businesses aimed for shareholder value, by maximising wealth for their owners, promising efficiency, prosperity and jobs. Governments set taxes and wrote rules but broadly left business alone. Although the gains of the system were not evenly spread across society, trade flourished and consumers benefited from greater choice and cheaper goods.

The rules have changed. Governments are becoming more dirigiste, spurred by fragile supply chains in the pandemic, a more menacing China and the dangers of climate change. Company ceos need a new approach for a new age.

Businesses’ re-entry into politics began in the run-up to the Trump era. By taking a stand on social issues bosses saw a way to signal their distaste for populism—and surely also a way to signal their virtue to their employees and customers. It was around this time that Larry Fink, the boss of BlackRock, America’s largest asset manager, became a proponent of investing using environmental, social and governance principles, or esg.

Yet instead of solving social problems, that seemed only to deepen divisions. As we set out in an extended profile, Mr Fink has been demonised by the right for going too far and the left for not going far

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