How can Companies Regain Legitimacy in Chile?
The social crisis that boiled over in Chile in late 2019, followed by the Covid-19 pandemic, revealed a profound disconnection between the country’s business elite and the common people. In this context, company directors and executives must reformulate their relationship with the community and ask themselves how they should change in order to recover legitimacy and rebuild trust with stakeholders.
To address these issues, the Santiago Center, in collaboration with the Chilean-North American Chamber of Commerce (AmCham), organized a webinar entitled “The Questions Companies Should Ask (Themselves) in Chile,” with panelists Karen Thal, CEO at CADEM, Nicole Keller, Vice-President at Metro de Santiago and Partner at EK, and Juan Pablo Luna, Political Scientist and Professor at Universidad Católica’s School of Government.
During her opening remarks, Paula Estévez, CEO at AmCham, emphasized the relevance of these discussions as they allow for the exchange of visions regarding the private sector’s contribution to society.
After Estévez’s introduction, Thal commented on the political and social context leading to the distrust of Chile’s business elite. She explained that since October 2019, Chile has witnessed the collapse of several “fantasies” such as social mobility, immortality and freedom (due to Covid), economic stability and political certainties, provoking a crisis of trust affecting all institutions. This mistrust particularly affected those entities that hold the most power, like the business sector, as opposed to those which have ensured the supply of essential goods and the functioning of the country throughout the pandemic. What can be done in this complex scenario? “We need to understand that we’re all part of the problem and therefore we must be part of the solution. This is not a problem concerning only politicians and the state, so we need to leave our comfort zones and move towards connection and empathy,” Thal said.
Keller, then reflected on the scenario the business sector must face in order to win back trust from stakeholders, stressing it is vital for companies to reformulate the questions being asked at the executive and board levels. Nowadays, companies are aware of citizens’ concerns, and they must find a way to connect with that, more so than choosing their own issues to defend, she said. “I firmly believe in the role of companies and their contribution to society, but we need to stop having conversations leveraged on old concepts that do not relate with the country’s present. Can we talk about the past? Yes, but today the focus must be on the future,” Keller noted.
In turn, Luna commented on how the country is facing a political, state, and economic model crisis. Regarding the model, he stated that although certain aspects have proven successful, it presents serious problems and structural flaws, being perceived by many as having allowed companies to abuse citizens. Facing this triple crisis, Luna sees a scared, cornered, and defensive elite. The professor, who has conducted in-depth research on how businesses relate to communities, stated that to overcome the current situation, companies need to do things differently in order to build a new model “that can gradually recover the moral economy that has been lost during the last 30 years, in which society slowly began to get enraged.”