Anti-corporate activists are much like minor parties, in that they see their role as stirring up the major corporate businesses just as minor parties stir up the major political parties. One recent case of such activism, an adjunct of broader refugee and asylum-seeker politics, has been the campaign against Transfield Services, the company which has the $1 billion contract to manage government detention centres on Nauru and Manus Island.
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The activists, led by No Business in Abuse, an offshoot of GetUp!, have had some recent success in pressuring superannuation funds to divest their investment – that is, sell their shares – in Transfield. Some industry super funds, like HESTA, have announced their intention to join the movement to divest.
Now Transfield soon to be known as BroadSpectrum, is fighting back by seeking the support of the wider business community for its position. The newspaper of the business community, The Australian Financial Review, has thrown its support behind comments by Transfield chief Diane Smith-Gander in asking for "the investment community generally to stand up against this activist warfare". The military language echoes that of the previous Abbott government, which felt it lacked such business support on many issues, including budget reform.
Smith-Gander's position is that activist criticism is both unwarranted and misplaced. If activists have concerns and want to change government policy on detention centres, she says, "they should engage directly with the government". That would be futile of course, as Smith-Gander recognises, because the detention centre policy that Transfield administers has the support of the government and the opposition. The parallel with party politics is clear.
Transfield is interested only in the business case for the management of the detention centres and believes that the business should not be politicised in any way. Furthermore, Smith-Gander says her company has no influence, and apparently wishes to have no influence, over government detention policy. That is a line between politics and business, policy and administration, which is very difficult to draw, especially as Transfield is very close to the government through its previous chairman, Tony Shepherd. However, the Financial Review supports this view by saying politics and the market should not mix.
No Business in Abuse executive director Shen Narayanasamy, a GetUp! staff member, organised a protest against Transfield's managing director holding a non-executive director position on the board of energy company AGL by having the issue raised at its annual meeting. That shows that this type of politics cannot be narrowly contained.
There have now been decades of activism against companies as part of wider political campaigns. Activists have fought for the right to speak at AGMs of big companies to have their voices heard. Ethical investment has become an industry in itself for individuals who don't want to be associated with industries, like uranium mining and armaments manufacturing, that run counter to their personal beliefs. Such strategies have led to organisations like universities and orders of nuns taking an interest in work previously left to their accountants and business managers. Those managers had previously just been tasked with getting the best possible financial return on the organisations' investments. Within many organisations those days have now gone, much to the surprise of the business and investment communities.
The argument often used by business, in this case Transfield, is that its activity is lawful, not just in a legalistic sense but in the active sense of working closely with the government, but this line has lost its persuasiveness. Cigarette and tobacco companies used the same argument for years. It proved to be ineffective. Armaments manufacturers do the same and operate under the protection of governments around the world.
It is also not enough to claim that business is apolitical when it clearly gets involved in politics when it wants to. Businesses winning government tenders have a conflict of interest in the politics of government policy in their field. They can't wash their hands of the legitimacy of that policy.
Like minor parties, anti-corporate activists have the game stacked against them. They have some leverage and some financial resources. However, in the hyped-up language of warfare used by those who editorialise against them, they are vastly outgunned.
The main problem that these activists face is that the investment industry is a game for big players. That is why activists seek an entree through superannuation funds rather than directly through their own investments. Otherwise the managers of the big superannuation funds are totally removed from all those ordinary citizens whose lifetime savings they manage and whose interests they claim to represent.
The AGMs of big companies are usually as tightly controlled as the annual conferences of the major political parties. Anyone who is trying to inject an alternative view at a company AGM is as unlikely to succeed as someone trying to challenge the big factions from the floor of a party conference. They have next to no hope. Positions on boards in big companies are like safe seats in the major parties. They are all stitched up.
That is why talk of anti-corporate activists misusing corporate democracy is hollow. They are not playing the corporate game as those in control would like it to be played. Rather they have found some loopholes which enable them to make some noise.
Public opinion will be the ultimate guide. The status quo will generally prevail in politics and business because big parties and big business have the passive support of the majority of the community. But it still does them good to be held accountable for "business as usual".
John Warhurst is an emeritus professor of political science at the Australian National University. John.Warhurst@anu.edu.au
