In brief
- Corporations and universities have many stakeholders, with differing opinions. Promoting one agenda may be an affront to the other stakeholders.
- Directors who prioritise their political agenda over their fiduciary responsibilities to shareholders are increasingly facing legal action from non aligned shareholders.
- Universities promoting specific ideologies stifle academic freedom, mirroring corporate abuses. Will they potentially provoke action to ensure both free speech and counter the abuse of authority?
Corporations and universities have a mission and it isn’t politics
Both corporations and academic institutions have a primary mission —business growth and educational excellence — not political advocacy.
Shareholders invest in companies seeking financial returns. Similarly, students and faculty at universities should expect to be exposed to a range of ideas, which encourages debate in an environment that tolerates dissent.
In our view, it’s bizarre that this is controversial for some activists. Management leveraging their positions, over someone else’s assets, even if most stakeholders agree, is not only abusive, but also potentially actionable.
Shareholder rights vs political agendas
Shareholders can sue directors for failing in their fiduciary duties. For example, Diversity, Equity, and Inclusion (DEI) programs have become a focal point for many corporations, but are increasingly resulting in several legal risks for companies.
According to Breck Dumas from FOX Business, “anti-woke” shareholders at Target and Dick’s Sporting Goods have presented proposals aimed at preventing the boards from making hyper-political decisions in the future, arguing that these decisions are made at the expense of shareholders.
Companies like JPMorgan Chase and BlackRock have modified DEI policies, removing specific references to racial and ethnic representation to mitigate legal risks.
Target faced backlash for its Pride Month displays, which led to a significant drop in sales and a damaged stock price, prompting a $12b lawsuit against the company.
Ideological capture of universities
Critics argue that universities, traditionally bastions of diverse thought and free expression, are increasingly promoting specific ideological perspectives, which has led to “ideological capture“.
This is where dissenting voices are systematically weeded out.
Dr Paul Crowhurst’s experience at Massey University illustrates this trend.
After writing an op-ed critical of a new anti-racism initiative in 2021, which does not seem extreme to us, emails revealed some faculty members deemed his views ‘horrific’ and ‘deeply racist.’ This ultimately led to his exclusion from a permanent teaching position.
This ideological gatekeeping (mostly behind closed doors) not only stifles academic freedom, but also mirrors the abuses seen in the corporate world.
The role of government in promoting balance
Governments that align ideologically often overlook or even support these abuses. But the tide often turns. ACT has proposed to forward a bill ensuring free speech on campus with MP Parmjeet Parmar arguing that:
“Taxpayers don’t fund universities to protect students from difficult ideas. To the contrary, university is a place for difficult discussion, for testing popular assumptions, and for building resilient young adults.”
The University of Otago has recently issued a Statement of Free Speech, which, in part, says:
“The University affirms that it will not restrict debate or deliberation simply because the ideas put forth are thought by some to be offensive, unwise, immoral, or wrong-headed. It is for the members of the University community – its students and staff – to make those judgments for themselves. The University is not a place for safety from ideas – it is a place to engage in critical thought and debate in the pursuit of knowledge and understanding. “
Parmer contrasts this with “the weak academic freedom policy of Massey University, which cites ‘mental harm’ as legitimate grounds for limiting speech.”
