Casting an Eye On The Shame Resilient Enterprise: CBS
Could America’s Pioneering Broadcaster Be Leading The Way To The Sensible Corporate Reputation Risk Management Tools Our Economy Desperately Needs.
Long before there was the U.S. 1st Amendment that made free speech a thing, or the 19th Amendment that made equal sovereignty for women a thing, there was the thing itself that made all those things -- the U.S. Constitution. And near the top of this amazing algo of freedom and wealth, is Article 1, Section 8: The 20-or-so instructions that cull out the powers of the legislative branch to tax, borrow, and establish rules of naturalization.
The instructions that matters most, in these dark times are those in instruction four. The rules that create a common procedure for forgiving the mistakes made in business. Otherwise known as bankruptcy, these principles would make the United States, from its earliest days, an alternative to the deeply destructive, 18th-century business cycle of utter social shame, unredeemable financial ruin and debtor’s prison for those anywhere near a failing business. Read Charles Dickens’s classic Bleak Houseon what life was like with when the risk of unforgiveable financial ruin lay around every corner.
Numbingly, its century-old Victorian story is not far from our own dystopian narratives of digitally socialized hate.
Instead, our founding citizens were business people who were careful to make an America that would enjoy a never-before-seen, ordered means of making amends to those injured when businesses failed. There would be known scales of guilt for any given business mis-step. And then the means to value and administer that guilt in the calm light of judicial day.
“To contract new debts is not the way to pay old ones," was how George Washington summed up the American approach in 1799, just before he died.
For Washington, the Second Act was America’s great invention.
The Shame-Resilient Bet.
Well, it turns out one of America’s pioneering broadcasters, CBS Corporation, has the chance to act in just that spirit of business forgiveness. We are not getting into names here or guilt or innocence or who is right or wrong. All we are saying is that a CBS executive is in the middle of by-now common shame-driven controversy. A controversy that immediately eroded CBS Corp enterprise value by around 8 percent. But unlike dozens of other companies that adopted a fire-first and ask questions later policy, whenever social media-driven shame tarnished their reputations, CBS has not immediately dismissed this executive.
And quietly, over the past couple of weeks, CBS stock has stabilized and is now gaining value.
Again, we have no idea who is guilty who is not. And we have a lot to say about what a truly shame-resilient enterprise needs to be in this age of social capital punishment. But CBS’s tempered reaction to shame-driven news indicates there might be a way to dismantle the social media guillotine that threatens to undo America’s basic principles of business forgiveness.
So in that spirit of moving on and getting back to real task at hand, of creating value, we wish the CBS Executive Board of Shari Redstone, David Andelman, Joe Califano, William Cohen, Cary Countryman, Charles Gifford, Leonard Goldberg, Bruce Gordon, Linda Griego, Robert Klieger, Arnold Kopelson, Martha Minow and Doug Morris all the wisdom they need to find that sensible middle ground that manages the reputation risk of the modern enterprise with appropriate due process, stiff penalties and the proper procedures for making amends to those injured.
Strictly speaking this group, by merely not reacting mindlessly to bad news, makes CBS a real value for investors. It also doesn’t hurt that the operation is posting a hell of set of numbers. And has some great shows.
Because if somebody smart doesn’t come along, and figure out how to protect Americans who risk their all to do business, there won’t be much business left here in America.
