Businesses put politics aside, take new president in stride
— -- Is big business going blue? Not IBM blue, but politically blue, as Barack Obama takes up residence in the White House and Democrats solidify their hold on Congress.
Absolutely not, says Tony Coelho, the former Democratic congressman from California and House majority whip, who has sat on several corporate boards including Tele-Communications Inc. before it was acquired by AT&T. Business will adjust and cooperate with President-elect Obama just as it did with President Clinton, but "business supports Republicans," Coelho says.
A survey of 751 CEOs in September by Chief Executive magazine seems to support Coelho's assessment. Two months before the election, John McCain had a 4-to-1 margin among them, and 74% said they feared the consequences of an Obama presidency. Howard Putnam, former CEO of Southwest Airlines and Braniff International Airways, met with a number of Fortune 500 executives in Los Angeles in early November just after the election. "I found no evidence that business is turning blue," he says.
But September and November seem a lifetime ago, and it's hard to ignore the Who's Who of business leaders who have rallied around the 44th president, starting with Warren Buffett and Obama's transition economic advisory board that includes Xerox CEO Anne Mulcahy, former Time Warner chairman Richard Parsons and Google CEO Eric Schmidt. General Electric put out press releases this month saying it "applauds the president-elect's bold vision."
If business is nothing else, it is pragmatic, and evidence of it can be found in the October/November issue of the Academy of Management Journal. The study says that when a party gains control of the House, Senate and presidency — something that happened after the victories of Clinton in 1992, George W. Bush in 2000 and now Obama in 2008 — former congressmen and Cabinet members of the party in power stand a better chance of landing a corporate board seat than members of the party out of power. Study co-author and Texas A&M management professor Richard Lester says the chances of a former Republican congressman or Cabinet member gaining a seat on the board of a large corporation went down 29% with Obama's victory.
Such a shift in the politics of board members is becoming increasingly meaningful. In 1973, 14% of large corporate boards included a former Cabinet officer or member of Congress. By 2007, that had risen to 52%, according to executive search firm Korn/Ferry International. The reason is influence, Lester says.
Government is a large customer. Government can influence trade, taxes and standards on everything from safety to the environment. Massive stimulus spending and legislation as sweeping as energy policy and health care reform will swing billions of dollars in revenue and stock market value to some companies and not others, creating corporate winners and losers.
