The ruling People Power Party (PPP) clinched a landslide victory in local elections on June 1. Although the new government started with the lowest approval ratings compared to any previous government, the local elections boosted its insufficient political power. The political season has ended. Now, it is time for the government to focus on resolving our social issues in earnest.
After completing the presidential and local elections, the Korean political landscape turned favorable to business for three reasons.
First, political engineering is becoming business-friendly. How efficiently and stably the government operates state affairs will decide the outcome of the next legislative elections in April 2024. By then, two years after the government's inauguration, it will be almost impossible to blame the previous administration or the smaller proportion of the ruling party in the National Assembly.
If the ruling party fails to secure a majority in the parliament in the 2024 elections, the government will have to suffer the disadvantage of being a legislative minority. Therefore, the government will try to exert all efforts to manage state affairs stably and efficiently. To do so, it cannot help but listen to the voices of many stakeholders, including companies.
Second, the role of corporations as major economic players has become bigger. A significant part of our social problems is employment-related. Only companies can solve the job problem in the process of economic growth. The government’s policy to create jobs in the public sector can be only temporary and is not sustainable.
Third, Korean society has become democratic and transparent. We have established a democracy in a generation as multiple parties with different political orientations have taken powers peacefully. An opaque government operation and abuse of power led to the impeachment of a president. The recent elections showed that the conservative party could also pursue pragmatic market-friendly policies while demonstrating political legitimacy and transparency, as opposed to the past.
In this environment, companies can now break free from the past shadow of collusion between business and politics and participate in public debates transparently. Instead of simply filling complaints of business difficulties, corporations should actively propose visions and plans to the government regarding what kind of institutional frameworks and conditions it should make for our future society and public welfare.
Previous governments have pushed these goals through national slogans such as “globalization,” “open market economy,” “green growth,” “creative economy,” and “innovative growth.” Now, it is time for companies to suggest visions and detailed measures and actively pursue economic and social values in harmony.
Companies have joined the Global Alliance for Banking on Values (GABV), a group of banks that have given up on maximizing profits and declared the realization of social values for their management goals, or RE100, a global initiative to solve environmental problems. These activities are now becoming essential in corporate activities.
If a company focuses on a society’s sustainability beyond corporate social responsibility (CSR), it will bring long-term benefits to the company.
We have often witnessed that companies that performed such roles well became industrial leaders and sustainable economic players (long-lived companies).