Governing a democratic country for the welfare of all citizens is a different ballgame to managing a limited liability corporation to increase returns for its shareholders. Business schools produce managers for business companies: they are not equipped to govern complex socio-environment systems which countries are.
CEOs can acquire other companies to increase their companies’ incomes and downsize their workforces to improve profits. Leaders of democratic countries cannot buy other countries to increase GDP or ship out people from their countries when the economy is strained. Donald Trump, the master of the business deal, thinks he can. (Read here in The Economic Times today. Full text below). https://economictimes.indiatimes.com/opinion/et-commentary/zohran-mamdanis-win-challenges-ceo-style-governance-urging-empathy-over-metrics-in-leadership/articleshow/122255276.cms
A social enterprise must not become a business enterprise. The measures of its success cannot be the size of its budget and how much it gave away. Its’ performance must be measured by the principle of anantodaya: how much it increased the dignity and self-reliance of the poorest persons in the community. (See the pdf and text of my article, below, published in The Entrepreneur India magazine in July 2025).
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THE VALUES THAT MUST GUIDE GOVERNMENT AND BUSINESS LEADERS
(Published in the Economic Times on July 5 2025 as Mamdani’s Leadership Challenges CEO Governance)
The unexpected victory of 33-year-old political rookie, Zohran Mamdani, over 67-year-old, and seasoned political leader, Gov. Andrew M. Cuomo in New York’s Democratic mayoral primary, has opened the debate of whether younger leaders with enthusiasm are better than older leaders with experience.
The Boston Consulting Group has examined the effects of aging leadership on a company’s performance and vitality. Comparing the performance of 1000 publicly listed companies, the research concluded that the older the average age of leadership was, the lower the firm’s vitality. The problem with statistical research is that correlations amongst two variables in one context cannot be applied to another. For example, performance and age are related in physical sports because they require physical ability. Skills specific for the sport are also required. Whereas skills and judgement improve with experience, physical ability decreases with age. Therefore, older sports stars must concede to younger players even before they are forty. However, leaders in business and government, have less need for physical strength than sports stars. And their leadership tasks and skills they need are different.
Ronald Reagan said, “Government is not the solution: it is the problem.” US economists and corporate CEOs adopted this slogan. Corporate CEOs were celebrated as the models to follow in the heady days of corporate capitalism and the Washington Consensus. Even some heads of government and chief ministers of Indian states were called CEOs of their states and feted in the World Economic Forum in Davos. Differences between the responsibilities of corporate CEOs and governmental leaders, and the inappropriateness of the CEO model for government were not understood.
In those days, Jack Welch was among the most celebrated CEOs in the world. He had created enormous value for GE’s shareholders. He had a reputation for toughness, for insisting that every year the poorest performers must be removed from GE. He downsized the workforce when hard times came; and acquired and sold companies to increase GE’s shareholder value. His methods became ‘best practices’ taught in business schools and propagated by management consultants.
Imagine the head of a country, even an unelected one. When times are tough, can he ship out people from the country to reduce the burden on national finances? Can he buy and sell other countries to increase his country’s GDP when economists express concern about its decline? Yet, this is what Donald Trump is doing. Chasing immigrants out of the US. And offering to buy Greenland and threatening to convert Canada into a US state.
A country is not a business corporation and should not be run like one. The instruments that leaders of governments and leaders in the corporate world can use to produce results for their stakeholders are different, and they must be so.
1. A business corporation is an economic institution. A nation is a socio-political institution.
2. The legal owners of a business corporation are its investors. The legal owners of a country are “We, the People”—all its citizens.
3. The rights of investors in a business corporation are proportional to their ownership. Those who own more, have a greater say on how the corporation is run. In a true democracy however, all citizens, whether billionaire or pauper, have equal rights.
4. The liabilities of business corporations are limited by law. They are not legally accountable for the impacts of their profit-making activities on the environment and society. Thus, corporations are selfish citizens created by law, but given the same rights as human citizens to protect their own properties and sue other citizens.
5. Leaders of governments are responsible for the welfare of all citizens. They must discipline all, including large business corporations, who cause harm to others. Therefore, government leaders must give precedence to the ‘ease of living’ of common citizens over the ‘ease of doing business’ of corporations and their investors.
Mamdani has not yet been elected mayor. He is only the candidate for the Democrats, a political party which lost touch with the needs of poorer, working-class people. Donald Trump, a billionaire, tapped into this need and beat the Democrats. The Democratic Establishment, including billionaires Michael Bloomberg and Bill Ackerman, and former President Bill Clinton, who revived the Democratic Party’s fortunes in the 1990s by raising more money from Wall Street than Ronald Reagan could, supported Andrew Cuomo.
‘Socialism’ is a verboten word in the US. Mamdani, with his concern for common people, has been branded a ‘socialist’ by both, Republicans, and the Democratic establishment.
New York’s businesses have become alarmed that Mamdani, if elected, will push through his agenda of public welfare, and reduce bus fares and rents for poorer citizens, and tax them to balance the budget.
Leaders of all governments must be socialist in their hearts, by ‘putting the last first’ in their policies—Gandhiji’s principle of Anantodaya. He hoped that even business leaders would follow this principle, as ‘trustees’ of a society’s resources and its wealth, not its owners.
Human values must guide their business decisions, not stock market valuations of their wealth.
Arun Maira
Author of Reimagining India’s Economy: The Road to a More Equitable Society, published by Speaking Tiger Books in June 2025
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HOW ENTREPRENEURS ARE REIMAGINING INDIA’S ECONOMY
According to Webster’s Dictionary, an entrepreneur “is a person who organizes and manages any enterprise, especially a business enterprise, usually at considerable risk and initiative”.
As a management consultant I have guided many business leaders with the disciplines of systems thinking and systems acting to navigate through VUCA (volatility, uncertainty, complexity, and ambiguity), and ways to create innovations in their enterprises. Twenty years ago, my interest shifted from the world of business entrepreneurs to the broader world of social entrepreneurs.
I participated in a meeting on “Business as an Agent of World Benefit”, between the UN Global Compact, of whom I was a senior adviser, and the Academy of Management in Cleveland in 2006. The UN Global Compact is an international organization of business corporations that have volunteered to conduct their businesses in a way that will improve society and save the environment. The Academy of Management is the largest organization of business management teachers in the world.
Over three days, thousands of persons from around the world participated in the meeting online and in person. A survey of 2,100 students in 87 business schools found that 87 per cent believed that corporations should work towards societal goals, but only 18 per cent believed they were. Two statements by students were compelling. One was: ‘The key business role should be to develop society, not profits’. The other: ‘Profitability is easy: changing the world is hard’.
Business entrepreneurs and social entrepreneurs live in very different worlds. The measure of the success of a business entrepreneur is how wealthy, and how quickly, he or she becomes. The value of an enterprise to the country cannot be measured by the value it creates in stock markets. The measure of success of a social entrepreneur is how many poor people’s dignities and lives are improved by the enterprise, sustainably. The caring of business entrepreneurs for society cannot be measured by how much of their wealth they give in philanthropy, which is usually a tiny fraction, or by a corporation’s expenditure on CSR, the norm for which is only 2 per cent of profits. Their contributions to the improvement of the condition of their societies must be measured by howthey produced their wealth and profits. What impacts do their products and services have on the lives of the poorest people? How many people were engaged in the production and delivery of the products and service? Were they paid well, and provided with adequate social security? How was the environment destroyed in the process of extracting value for their business?
Indian entrepreneurs must reimagine their contribution to India through the lens Mahatma Gandhi provided. He gave a talisman to entrepreneurs and leaders, in business and government: Anantodya. Whenever you take a decision, think of how it will improve the life of the poorest person in your community. Or, as Lord Krishna said to Arjuna in the Gita. You have a right only to the work, not the fruits thereof. The fruits of your work must be the improvement of the lives of the poorer people of India, not the increase of your wealth and fame.
Arun Maira
Author of Reimaging the Indian Economy: The Way to a More Equitable Society (published by Speaking Tiger Books)
June 14, 2025
