IPA Today

Business Has Gone Woke – So Libs Should Focus On Dandenong Not Davos

Written by
2 June 2022
Originally appeared in The Australian Financial Review

Peter Dutton was right to dismiss corporate Australia as being more in step with Labor and the Greens. The automatic and close relationship between the centre-right of politics and big business is over.

Anthony Albanese’s election victory has prompted all sorts of interesting reactions. Apparently, company boards should now start purging their ranks of “right-wingers”. That’s the view of Graeme Bricknell of the executive search and consulting firm, Korn Ferry.

As reported last week in this newspaper, according to Bricknell: “Boards need to pay attention [to the election]. If you’re a die-in-the-ditch, right-wing board member with fixed views about how things were done 15 years ago, your time is nigh.”

It’s unclear whether after the Coalition’s federal election victories in 2013, 2016 and 2019 Bricknell said companies should cleanse themselves of left-wing directors.

Also unclear is what part of the election result company boards should supposedly be paying attention to. Labor got 32.70 per cent of the primary vote and the barest of parliamentary majorities in the House of Representatives. The Coalition got 36.04 per cent of the vote, the Greens 11.9 per cent, while together the Liberal Democrats, One Nation and the United Australia Party got 10.7 per cent of the vote.

To most observers that’s a finely balanced outcome, revealing the need for magnanimity and moderation from our political and corporate leaders, rather than the justification for a radical reconstruction of the country.

Presumed political purity, not business acumen is now the prerequisite for selection to the board of a large Australian public company.

The only thing unusual about Bricknell’s opinion is he expressed it aloud. It’s exactly how most members of the company boards of big businesses think. Presumed political purity, not business acumen is now the prerequisite for selection to the board of a large Australian public company.

For example, it’s almost impossible to imagine an executive recruitment firm recommending or a company board accepting the appointment of a director who publicly questioned the wisdom of changing the Australian constitution to permanently enshrine racial difference.

A candidate for an executive or board position, who said they believed in what until very recently had been a core principle of liberal democracy, namely that all citizens are entitled to equal political rights regardless of their race, would probably never be heard of again.

Simply describing big business as “woke” doesn’t do justice to the transformation that’s occurred in corporate Australia over the past two decades. The rise of the industry superannuation funds, the influence of the “corporate social responsibility” movement, and the affluence of economic prosperity are not trends helpful to the political prospects of the Liberal Party.

And the Liberal Party as it usually is when it comes to issues of culture and values, has been caught completely flat-footed.

In the same way they still hold the quaint notion the average resident of Wentworth or Kooyong will vote for them (a fortnight ago Liberals received 41 per cent of first preferences in that first seat and 43 per cent in the second), Liberal MPs continue to be angered, frustrated and vexed by the support (or lack of) they get from big business. But they shouldn’t be.

One of the great insights of the keenest observer of the political economy of the 20th century. Joseph Schumpeter, was that big business has a bigger interest in itself than it does in the maintenance of the capitalist system – and the “creative destruction” of capitalism (a term Schumpeter coined) is, in fact, a threat to big business.

The marriage of big business to political conservatism whether in Australia, the US, or the UK has only ever been one of convenience. As soon as the conservatives’ opponents shed their adherence to outright socialism, any allegiance big business had to the centre-right of politics was dispensed with.

A few days ago, when Peter Dutton in one of his first statements as opposition leader “dismissed corporate Australia as being more in step with Labor and the Greens” he crystallised the second of the two great realignments represented by the 2022 federal election result.

The first is that the old electoral heartland of the Liberal Party is now Labor, Greens or teal.

The second is the end of the era of an automatic and close relationship between the Liberal Party and big business.

According to Dutton, as neatly expressed by Phillip Coorey, this newspaper’s political editor, “the way back to power for the Liberal Party rest[s] with small and micro-business operators, the suburbs and the regions”.

Not before time the Liberals have realised they should direct their attentions to Dandenong not Davos.

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John Roskam

John Roskam is the Executive Director at the Institute of Public Affairs

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