From risk to reward: How corporate America can rescue the country

• Many private sector companies are leading the charge to improve public education, enable economic development at home and abroad and improve health outcomes in the developing world.
• We need to re-examine how we develop our leaders — civic and private.

If there's one thing most of us can agree on in this age of cultural and political divisiveness, it's that rhetoric has replaced reality in our daily discourse and has reinforced a tendency toward finger-pointing versus collaboration.

At the same time, for-profit companies have become something of a punching bag. It's not hard to see why.

Multinationals are often blamed for a host of society's ills, including income inequality, environmental, health, public safety and diversity issues. Not to mention the shredded social safety net.

Having held leadership roles in the public, private and nonprofit sectors, I recognize the critical importance of cross-sector collaboration and the problem with finger-pointing. This is especially true when we as a society — citizens, and leaders from business and government — set out to improve the quality of life for ourselves and others.

When we demonize immigrants for "taking our jobs," educators for "failing our children" or corporations for "threatening economic opportunity," we shut ourselves off from a realistic opportunity to achieve progress.

But there is a better way.

My just-released book, "The Challenge for Business and Society: From Risk to Reward," attempts to substitute facts for anger with a new understanding about the role corporations have played and could play in addressing today's challenges. How many people realize the private sector established benefits such as paid vacations, free health care and retirement pensions long before government did?

Companies lead government, rather than follow

Consider the following:

• American Express created the first pension plan in the U.S. in 1875.
• Macy's launched a free health-care program for employees in 1870.
• By 1905, 25 percent of companies in a survey already offered a week of paid vacation before any government entity did.
• The company where I worked, IBM, opened the first integrated manufacturing plant below the Mason-Dixon Line and drove public school integration more than a decade before passage of the Civil Rights Act.
• In 1946, IBM, working with Columbia University, helped create the academic discipline called computer science, which later revolutionized technology in the nation.
• Before government got involved, companies such as IBM, 3M and Dow Chemical (now part of DowDuPont) instituted conservation and environmental stewardship policies for themselves and their suppliers.

Of course, along the way there were bad corporate stewards. From the robber barons of the early 20th century to more the recent actions of Bernie Madoff, Enron and Worldcom, it's not hard to find examples.

Yet today, many in the private sector are leading the charge to improve public education, enable economic development at home and abroad and improve health outcomes in the developing world:

• IBM's P TECH grade 9 to 14 school program, will reach 200 schools by 2019 with registrations of close to 100,000 students, offering a clear path from school to college and eventually a career.
• AT&T has invested millions to retrain and protect its existing workforce from layoffs due to the lack of education or skills.
• J.P. Morgan has invested in cities such as Detroit, spurring economic activities connected to growth and employment.
• DowDuPont and 3M, among others, are investing in efforts to protect the environment.
• Asset manager BlackRock has made it clear their investments will be restricted to those companies that combine the interests of business and society, connecting social good to the bottom line.

These efforts are not restricted to larger, old-line companies. Newer entrants such as Chobani, Kind and Starbucks have invested in social responsibility and pioneered in worker rights and education.

As we look to the future of relationships between business and society, we have essentially two choices: Hinder progress through constant bluster or pursue common goals within the context of common values.

Much of government regulation — legislation that can stifle growth — is designed to discourage and punish bad behavior. While such action is needed, conversely much less regulation is designed to stimulate, encourage and reward exemplary behavior. Collectively, we can "blame" bad actors for this environment, but we cannot assign all of those actors to any single group.

To move forward, we need to re-examine how we develop our leaders — civic and private. At the core of such training must be a much stronger commitment to ethics, values and a commitment to community service. When educated in — and guided by — those principles, those who lead will do so by personifying our best approaches to innovation, cooperation and the partnerships we need if we are to create a better world.

Stanley S. Litow is president emeritus of the IBM Foundation, a professor at the Columbia School of International and Public Affairs, and a former deputy chancellor of the New York City Schools.

Litow's book, "The Challenge for Business and Society: From Risk to Reward," was published by John Wiley & Sons in May.