Corporate Citizenship and Urban Problem Solving: The Changing Civic Role of Business Leaders in American Cities

ABSTRACT:

Our concern in this article is corporate civic elite organizations and their role in social production and urban policy in the United States. Recent urban literature has suggested that the power and influence of CEO organizations has declined and that there has been some disengagement of corporate elites from civic efforts in many urban areas. Yet while these trends and their likely consequences are generally acknowledged, relatively little empirical research has been conducted on the nature and extent of the shifts in corporate civic leadership and on how these shifts have affected the civic agendas of central cities and metropolitan regions. In this study we obtain data from 19 large metropolitan areas in order to more systematically examine shifts in corporate civic leadership and their consequences. Our results suggest that the institutional autonomy, time, and personal connections to the central cities of many CEOs have diminished and that the civic organizations though which CEOs work appear to have experienced lowered capacity for sustained action. These trends suggest that while many CEOs and their firms will continue to commit their time and their firms’ slack resources to civic enterprises, the problems they address will differ from those tackled in the past. We discuss the important implications these shifts have for the future of corporate civic engagement in urban problem solving and for the practice of urban governance.

Notes

1 Clarke et al. (2006), however, suggest that despite globalization, businesses that rely on strong human capital and geographically specific assets have an incentive to engage in local issues that will increase their competitive advantage in the global economy. Thus, while overall civic engagement may be declining, absentee-owned corporations may still have an incentive to invest in local public services (such as education) that will benefit them in the long run.

2 We eliminated CEO organizations in the three largest regions—New York, Chicago, and Los Angeles—because of their size.

3 These results include data from three separate case studies that were conducted in Baltimore, Cleveland, and Dallas.

4 A sector’s location quotient compares its role in the metropolitan economy to its role in the national economy, making it possible to identify local economic specializations. A location quotient greater than 1.0 indicates that a greater proportion of workers are employed in that sector of the metropolitan economy than work in it nationwide. Such sectors contain an area’s basic industries, serving both the local economy and other regions by exporting goods and services.

5 These changes were not solely the result of relocations, growth, or the demise of older established firms. Some of the increases were the result Fortune’s decision in 1995 to add trade and service sector corporations to the traditional industries it had always ranked. The effect of this change was two-fold. First, regions gained if they were home to large service corporations. Second, the inclusion of retailers and service sector corporations bumped smaller industrial corporations from the top 500 list. Best Buy, Target, and Dayton Hudson increased the number of Fortune 500 companies in Minneapolis-St. Paul, and J.C. Penney, Neiman Marcus and Tandy Corp. boosted the number reported for Dallas-Fort Worth. Washington, Minneapolis-St. Paul, Seattle, and Dallas-Ft. Worth all benefited from growth of the high technology sector.

6 A significant exception to foundation reticence in entering the economic development arena has occurred in the Cleveland area. Led by the Cleveland and Gund foundations based in Cleveland, and Akron’s GAR Foundation, 70 foundations in northeastern Ohio pooled resources in 2004 to create a 3-year $30 million Fund for Our Economic Future. The Fund’s objective is to frame a regional economic development agenda designed to produce a long-term economic transformation of the region, track economic progress, and invest in promising initiatives.

7 A retired utility CEO recently served as chairman of the Greater Baltimore Committee, for example. The Greater Milwaukee Committee created a “sustaining member” category for retired executives, and GMC pairs retired or retiring executives with younger CEOs as committee cochairs as part of its strategy of developing civic leaders.

8 For details, see Hanson, Wolman, Connolly, & Pearson (2006).

9 Examples are the Greater Baltimore Committee, Charlotte Regional Partnership, Greater Cleveland Partnership, Metro Hartford Alliance, Greater Houston Partnership, Civic Council of Greater Kansas City, Council, Greater Milwaukee Committee, Greater Philadelphia Chamber of Commerce, Greater Phoenix Leadership.