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The value of courage

by Charles G. Koch, Chairman and CEO, Koch Industries, Inc. 10/2/2012

One of my greatest frustrations in recent years stems from the lack of courage shown by many businesses.

Rather than set a good example and stand on principle, far too many successful companies have decided to cave when faced with criticism from the media or the government – even when those businesses have done nothing wrong.

For example, last March, left-wing publications and a cable “news” channel began spreading  malicious  lies about the American Legislative Exchange Council. ALEC is a leading free-market association of state legislators with thousands of members and supporters, including Koch Industries.

The bogus charges against ALEC were quickly echoed by various media outlets, bloggers, a labor leader and other activists, none of whom seemed fully aware of the facts.

As a result of this ginned-up outcry, a few high-profile corporate members of ALEC either cancelled their memberships or announced they would let them expire.

It didn’t seem to matter that the accusations were patently false, or that facts had been distorted and the truth inverted. Several corporations couldn’t throw in the towel fast enough.

Such lack of courage has become symptomatic of large public companies.

Value of courage

It is difficult to underestimate the value of courage, especially during challenging times like these, when we are being attacked by powerful politicians and irresponsible media.

“Courage is rightly esteemed the first of human qualities,” Churchill wrote, “because it is the quality that guarantees all others.”

My father certainly agreed with that sentiment. The year before I came to work here in Wichita, he told a group of business students how important it was to stand on principle.

He said: “If you are right and it really matters, don’t be afraid to stand up and say so.”

My father practiced what he preached. When a large and well-funded consortium of patent holders unfairly sued the independent refiners who were his customers, Fred Koch fought back.

This resulted in a legal struggle that lasted nearly 20 years. There were several bitter disappointments along the way, including judicial bribery by some of his opponents.

During this time, my father and his business partner were essentially shut down in the U.S. But rather than giving up, he had the courage to fight the good fight. In the end, he persevered and won.

Starting point

Because of the alarming lack of courage displayed by so many businesses in today’s hostile environment, I began thinking that courage needed to be included in the wording of our MBM Guiding Principles.

As you can see from the story on page 4 of Discovery, that opened the door to a discussion about several other changes to those Principles.

Courage – which we define as the mental or moral strength to venture forward, persevere and  withstand danger, fear or difficulty – can be displayed in many ways.

It takes courage to argue against ethanol subsidies when you own and operate four ethanol plants.

It takes courage to say that protective tariffs on foreign goods should be lifted when you operate hundreds of manufacturing plants here in the U.S.

It takes courage to turn down an investment in a solar energy firm that is guaranteed to be profitable, but only because of its federal subsidies and mandates.

It takes courage to invest billions in capital improvements, many of which will create jobs and dramatically reduce emissions, when you have no idea when you will receive the necessary permits.

It takes courage to stay the course when those who should be allies are pursuing cronyism on a staggering scale, lobbying for billions of dollars in federal subsidies.

No company can consistently act with integrity if it lacks the courage to do so.

The good news is a growing number of businesses are willing to stand up to attacks and threats, and ensure business is conducted ethically.

One such example is BB&T, which – after the Supreme Court decision allowing developers to use eminent domain for private gain – established a policy of not lending for such purposes.

Value of adversity

A good friend of mine recently gave me a plaque that said: “What would you do differently if you weren’t afraid?”

I’d like to think we could look him in the eye and say, “Nothing.”

Our opposition is banking on just the opposite. They figure that if they apply enough pressure, we will cave in.

I realize, as do my brother David, our board and other shareholders, that if we slink away, ultimately we won’t have a business. And neither will anyone else – at least one worth having.

Acting with courage and integrity has nothing to do with personal glory. As I said on this page in July, the only thing I’m seeking is a legacy of greater freedom, greater prosperity and a better life for our families, employees and all Americans.

As writer James Allen put it: “Adversity does not build character, it reveals it.” We must display the courage and commitment necessary to do what’s right.

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