Accountable

June 15, 2020
Investors O’Leary and Valdmanis debut with a well-informed and idealistic call for a more ethical version of capitalism. The authors identify two competing visions for the American economy—a short-term profit-driven model in which corporations are beholden only to shareholders versus a stakeholder framework in which the concerns of customers, employees, and local communities are taken into account—and contend that the true measure of capitalism is its ability to lift people out of poverty. Distinguishing genuine corporate social responsibility from marketing initiatives, O’Leary and Valdmanis praise pharmacy chain CVS for banishing tobacco products from its stores in 2014—a move that cost the company billions in sales but aligned with its core values as a health-care business. The authors highlight the attempted 2019 takeover of newspaper publisher Gannett by hedge fund Alden Global Capital as an example of the threat unfettered capitalism poses to journalism, and advocate for people to use their votes, labor, and consumer choices to encourage conscientious behavior in corporations. Though the idea that Fortune 500 companies can be nudged to self-regulate will strike many readers as overly optimistic, O’Leary and Valdmanis offer an astute record of American capitalism’s best and worst qualities. Business owners and MBA students will value this helpful guide. Agent: Alice Martell, Martell Agency.

June 1, 2020
Insights about how to restructure American capitalism to better benefit society. O'Leary, a former economic policy adviser and founder of Bain Capital's social impact fund, and Valdmanis, the former managing director of that fund, join forces to evaluate an economy that is distressingly dominated by corporations "accountable to nothing but the bottom line." Though the authors celebrate the prosperity achieved by a capitalistic economic system, they also note the downsides and present achievable methods to alter corporations' "explicit amorality" in the interests of humanitarian efforts. After a short history of capitalism and the greed-based concept of fiduciary absolutism, the authors analyze the potential for corporations to channel their power toward more philanthropic and ethical consumer concerns. It won't be easy. As they note, this purposeful restructuring will require a high level of commitment to employees, customers, and the communities they serve. Indeed, the corporate balancing act between profitability and humanitarianism has become one of the greatest challenges for corporate strategists. The authors also skillfully appraise the worthiness of divestment strategies and the rise of lucrative impact investing, which "straddles the worlds of philanthropy and private equity." We meet a variety of enterprising CEOs, academics, investors, and business leaders--from startups to Fortune 500 companies--eager to share their blueprints for success. In the closing chapters, both persuasive and enthusiastic, O'Leary and Valdmanis outline three proposals for creating "corporations that reflect our values." One of their case studies is Etsy, a company in which accountability is the lynchpin in an endeavor the authors describe as a journey to "build an economy that generates prosperity without peril." An illuminating teaching tool for readers new to the nuances of the American economic climate, as well as seasoned economists eager for an update, this is a trenchant text on how capitalism has warped over time--and why it is time for a much-needed structural change. A sharp, ethically sound endorsement for capitalist reformation.

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