A New Scheme for Judging Corporate “Just”-ness, Starring…

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Paul Tudor Jones

Add billionaire Paul Tudor Jones II to the list of people who think they have a better way of rating and ranking corporations for their social responsibility—and, in the course of which, elevate their behavior and market attractiveness. Founder of a hedge fund that has made him unbelievably wealthy, but best known to many nonprofits for his establishment of the Robin Hood Foundation, an antipoverty public charity, Jones has launched a new nonprofit: JUSTCapital is a 501(c)(3) that, according to a statement on its website, “will be conducting a national survey to find out how America defines just corporate behavior” and “will track—in an unbiased and transparent way—the top 1000 companies in the country to see how they rank against America’s definition of just.”

Writing for Institutional Investor, Imogen Rose-Smith describes the Jones JUSTCapital plan as a “kind of crowdsourcing corporate governance” that Jones believes, she says, “could help tackle the income gap and reduce the divide between the haves and the have-nots.”

It may be that there’s a sort of magic associated with a social responsibility index that emerges from the imagination of one of the richest people in the world, given Jones’s estimated $4.6 billion in personal wealth. But his system of social responsibility ratings of corporations wouldn’t be the first by a long shot. There are many corporate social responsibility indices in use around the world, including the Thomson Reuters index, the Dow Jones Sustainability Index, the Calvert Social Index, the MSCI KLD 400 Social Index, and Corporate Responsibility Magazine’s “Best Corporate Citizens” index, just to name but a few. It may be the Jones name and his Robin Hood commitment to poverty reduction or the possibility that JUSTCapital methodology is to survey the public to define “just” will yield something substantially distinctive that these other indices haven’t discovered.

Perhaps it’s the NPQ propensity to look a bit deeper at announcements like this one that leads us to propose there may be bugs and contradictions in the definitions, that Jones’s JUSTCapital may not be quite as unbiased as it might want to appear, and that the likelihood of what it comes up with as “just” might not go down well with people across the board.

First, as the protests in front of Jones’s home in Greenwich, Connecticut earlier this year revealed, not everyone quite buys the billionaire’s anti-poverty commitment, or at least the Jones anti-poverty prescription. The protests, organized by the Hedge Clippers component of the Strong Economy for All coalition, targeted Jones for his support (along with that of his New York hedge fund peers) for New York Governor Andrew Cuomo’s taxation and school privatization policies. If JUSTCapital surveys the members of the Strong Economy coalition, which includes unions such as the AFL-CIO Central Labor Council of New York City, the SEIU United Healthcare Workers East, the Communications Workers of America, the New York State AFL-CIO, and the United Federation of Teachers, and citizen groups including the Alliance for Quality Education, New York Communities for Change, Citizen Action of New York, and the Coalition for the Homeless, the definition of “just” might not be uncomfortable for some corporate leaders and hedge fund directors.

Second, Rose-Smith makes a point of highlighting the membership of the JUSTCapital board of directors, which JUSTCapital does itself, for the credibility they add by their mere presence. The JUSTCapital board includes publisher Arianna Huffington, self-improvement promoter Deepak Chopra, Paul Scialla (of a New York “wellness real estate” firm and on the board of Chopra’s own foundation), and Alan Fleischmann (CEO of a communications firm and also on Chopra’s foundation board). Other board members shared between Chopra and JUSTCapital are Rinaldo Brutoco, founder and CEO of the World Business Academy, and Sonia Jones, the billionaire hedge fund owner’s spouse.

As described on Chopra’s website in a brief piece coauthored by Chopra and JUSTCapital executive director Martin Whittaker, the promised JUSTCapital corporate index sounds like it will be the Trivago of social responsibility indices, helping environmentalists, consumers, labor and others find what they need in the JUSTCapital ratings to assess corporate responsibility “based on the preferences, attitudes and values of the public.” Jones himself says that there will be an annual survey of 20,000 Americans to determine their criteria for justness, so that the criteria could in theory change in accordance with the changing attitudes and priorities of the public—though, interestingly, the survey is targeted to gauge American values and beliefs, not the perspectives of people in other countries that might not agree with what Americans determine to be a just company.

One board member who isn’t mentioned in the Rose-Smith article is Ray Chambers, listed on the JUSTCapital site as the United Nations’ “Special Envoy for Financing the Health Millennium Development Goals and For Malaria” with a link to the United Nations website. Chambers is also the founder of the Points of Light Foundation (which he did after being asked by President George H.W. Bush to do so)—then, with Colin Powell, America’s Promise, and with Jeffrey Sachs, the Millennium Promise Alliance that funded Sachs’s Millennium Villages Project (subject of a devastating critique by Nina Munk). Through his MCJ Amelior Foundation, Chambers has been a big funder of the Boys & Girls Club in Newark as well as other Newark, New Jersey-oriented institutions, notably the New Jersey Performing Arts Center, and has given to charities he has been associated with such as the Millennium Promise Alliance and Malaria No More. (The foundation has also made several modest grants to the Chopra Foundation.) No one should mistake Chambers for a left-wing critic of corporations; he was the business partner of former Treasury Secretary William E. Simon, making billions through their Wesray Capital Corporation private investment firm. Chambers has also long been a generous donor to primary Republican political candidates, though he contributed to the senatorial campaigns of former Newark mayor Cory Booker and former Points of Light CEO Michelle Nunn, both Democrats

Through these various charitable and political ventures, Chambers has been aiming to put a kindler, gentler, more compassionate face on Republicans and business—and in a way, so has Jones. “Capitalism has been responsible for every major innovation that’s made this world a more inspiring and wonderful place to live in,” Jones told a TED talk crowd last month. While taking pride and earning TED applause for having quadrupled the Tudor company’s corporate charitable giving, Jones expressed concern that corporate “profit mania,” which he surely has benefitted from in the form of billions of dollars in wealth, has “ripped the humanity out of our companies.” The way businesses are evaluated, focusing “on profits, on short-term quarterly earnings and share prices, at the exclusion of all else,” he believes, “threaten[s] the very underpinnings of our society.” Rejecting higher taxes along with revolution and wars, an interesting grouping that many advocates for fair taxes would find horrifying, Jones says the alternative for fixing the corporate world is to “increas[e] justness in corporate behavior.”

His solution involves corporate self-awareness and self-policing, the recognition of corporate CEOs that they will do better in the long run if they pursue greater social responsibility—hopefully with the help of JUSTCapital ratings in the hands of consumers and shareholders. Like Chambers, Jones thinks that, addressing the other corporate titans in his TED talk audience, “the time is now for us to show…fairness, and we can do that, you and I, by starting where we work, in the businesses that we operate in. And when we put justness on par with profits, we’ll get the most wonderful thing in all the world. We’ll take back our humanity.” In the Jones framework, rather than public policy mandates that might exact more taxes from Jones and other hedge fund billionaires to invest in public sector solutions, it will be justness, derived from corporations wanting to meet the public’s (through JUSTCapital’s) definitions and interpretations of what is just, that will make progress toward reducing the kind of inequities that Jones says must be addressed.

Writing for the Baffler, Helaine Olen describes Jones’s JUSTCapital idea as “focus group-ing our way to prosperity.” She suggests that the JUSTCapital approach of taking their ratings of 1,000 corporations isn’t particularly practical: “I can just see the Koch brothers quaking in their boots, wondering about their rating on JUST Capital’s list.” She further suggests that Jones himself might not be a paragon of social responsibility, noting that he “poured money” into Mitt Romney’s presidential campaign and, as one telling example that might cause second thoughts among women looking to the JUSTCapital ratings, that he justified the shortage of woman on Wall Street by explaining “that women with children simply aren’t capable investors.” (“As soon as that baby’s lips touched that girl’s bosom, forget it,” he said.) “So why is anyone falling for this?” Olen asks.

Olen’s comment implies that Jones is trying to snooker the public, to pull a fast one, but that may not be true. He may truly believe that corporate self-policing through yet another rating index that he and his JUSTCapital colleagues will generate for discussion and enlightenment among corporations will really work. Of course, it leaves out all of the populations who are clearly outside of the world of potential benefit from enlightened corporate practices, especially if the enlightened corporations eschew the higher taxes, as Jones does, that are necessary to generate government revenues to pay for currently underfunded safety net services. In his TED talk, Jones cited eighteenth-century philosopher Adam Smith, the author of Wealth of Nations, whom Jones referred to as “the father of capitalism,” to the effect that “If justice is removed, the great, the immense fabric of human society must in a moment crumble into atoms.” Jones, Chambers, Chopra, and others believe that it is possible, practical, and desirable to modify one’s own behavior and one’s corporate behavior for the public good—and still make a profit. Implicitly, Jones is suggesting that corporate social responsibility may be an integral component of corporate profitability in the future.

Maybe, however, Olen might have seen something in JUSTCapital’s first and only 990 that gave her pause. The multi-billionaire Jones made four loans to the JUST Capital Foundation (the entity’s formal name on its 990) in 2013, totaling $300,500. The loans, according to the statement in the 990, “were made to provide the Foundation with working capital until individual contributions and grants from the private and non-profit sector are received.” In other words, Jones loaned the nonprofit an amount that wouldn’t be noticeable as much more than pocket change in his personal or business finances rather than making an outright grant, a very odd move for the hedge fund philanthropist who is jumpstarting this new corporate responsibility index. But then again, with the history of corporate self-regulation and self-improvement in this nation, the entire notion of JUSTCapital seems odd.

  • Johan Matthews

    This may not be so odd considering the current climate of the social enterprise. As the article in the link below points out, the mass communication channels available have transformed the way companies must behave in order to capture the attention and wallets of their costumers. In order words “Companies that “out behave” their competitors will eventually outperform them as well.” Jones may well be JustCapitalizing in on this trend or as Olen puts it “focus group-ing” his way to prosperity. In any case time will tell. Judging from his foundation focus on venture philanthropy and capacity building and his partnership with Deepak Chopra, sustainability is seems to be one of his core concepts. As nothing is more sustainable than seeking out or educating one’s self on how to become better. In this regard his loan to his own organization may indicate this concept as well.

    Still it is usually wise to ere on the side of caution to someone who publicly denounced motherhood as an investment.