The Need for an Authentic Morality of Business

Shareholders are rebelling against the current "pseudo-morality"

Maloney Hall, home of the Busch School of Business at the Catholic University of America

The “original sin” of modern business theory is that business and ethics can be neatly separated from each other. Prof. R. Edward Freeman, father of modern stakeholder theory (and one of my doctoral dissertation advisors), called this the “separation thesis,” and argued, correctly, that it is false: all human action has a moral dimension, and business practices are no exception.

This false belief that business is somehow “morally neutral” left a moral vacuum in the marketplace, which has now been filled with a pseudo-morality that is little different from Marxism with a hip name (“wokeness”).

An authentic morality of business instead recognizes that the social contribution of a business lies in its production of goods, services, employment, and profits, all while respecting the human dignity of all of its stakeholders. Firing employees, pressuring states and municipalities, or de-banking customers, because they affirm ideas that are contrary to pseudo-morality are not actions that respect human dignity.

Several shareholders are using this meeting season to call out bad corporate practices and ask for greater respect for human dignity within their companies. Earlier this month, shareholders at JPMorgan Chase had the opportunity to consider and vote on a resolution filed by David Bahnsen asking Chase to account for what appear to be repeated instances of ideologically motivated de-banking.

Bahnsen’s resolution pointed to several disturbing instances in the financial company’s practices that appeared to be political and viewpoint discrimination. While the resolution focused on Chase’s decision to cancel the bank account of the National Committee for Religious Freedom headed by Ambassador Sam Brownback, it also called attention to Chase’s alarmingly low score of 15% out of 100% possible on the 2022 Business Index of Viewpoint Diversity Score, where I serve on the advisory council.

The Business Index measures corporate respect for free speech and religious freedom, comparing company policies and actions to First Amendment principles. It’s simple: if a company scores well, they are doing the right thing by respecting the freedoms enshrined in our Constitution. If not, they’re adopting policies and taking actions that undermine those freedoms.

Chase’s score—which fell to 9% in the newly released 2023 edition of the Business Index—comes as no surprise. In the past two years Chase denied payments or cancelled bank accounts associated with people and organizations who hold mainstream American values.

As findings from the Business Index highlight, any person or organization can have their account suspended, for any reason and with no explanation, under the current terms of service held by Chase and many other major banking corporations. Chase’s prohibitions on the promotion of undefined terms such as “hate” or “racial intolerance” create the conditions for employees to cancel or punish any account whose political or religious views run afoul of their subjective sensibilities.

These imprecise and unclear terms have allowed Chase to deny payments or cancel accounts associated with people and organizations who hold mainstream American values such as the Arkansas Family Council and Defense of Liberty. And despite repeated (and contradictory) statements to the contrary from Chase, this appears to have been the case with Ambassador Brownback’s religious nonprofit.

Along with resolutions from Bahnsen and the National Center for Public Policy Research, recent letters from 14 state treasurers and 19 state attorneys general have called Chase to account for these actions and correct its underlying policies—in large part by adopting policies included in the Business Index.

It’s wrong for Chase, as a bank receiving a host of privileges from the government and taxpayers, to require people to surrender their fundamental beliefs as a condition for doing business. Freedom of speech and religion are essential parts of human flourishing, because every person is born with the capacity to recognize the truth and the freedom to embrace it.

By de-banking people, a powerful company that ought to serve society is instead taking actions that cause people to fear voicing their opinions, practicing their faith, and participating in the democratic process.

Business leaders who want to promote human flourishing must stand up against corporate violations of free speech and religious freedom and embrace practices that respect everyone. The Business Index offers Chase and other major companies an opportunity to correct course and better serve society. Everyone who cares about morality in the marketplace should applaud this effort.