Though 91% of its 230,000 members are small companies, the Chamber is still run by corporate fat cats.
The U.S. Chamber of Commerce has always drawn its numbers from the ranks of small business. Its dollars, on the other hand, have come from the country's largest corporations. A mom-and-pop retail firm pays $100 to join the Chamber. The biggest companies are charged $75,000 or more. Dues for the average new member in 1981, according to Chamber figures, were $155.
It should surprise no one, then, that the heavyweight dues-payers -- major corporation executives -- hold most of the seats on the Chamber's board, and that the chairman of the board has always been a corporate mogul. In the last couple of years, however, small business members have begun to wake up. It is still true that, when the Chamber's board meets to ponder solemnly the future course of capitalism, the old corporate neckties are still worn. But now there is an irreverent small business commotion outside the boardroom door that won't be ignored.
One reason for the noise small business is making in the Chamber is the organization's phenomenal growth rate: Membership doubled in 1981 as 600 commissioned salespeople, reinforced by telephone solicitors, signed up new companies at the rate of 3,000 per week.The Chamber closed 1981 with about 215,000 members, almost halfway toward its goal of a half-million by the end of 1983.
As the Chamber gets bigger, its members get smaller. You can't recruit 100,000 new companies from the Fortune 500. Between April 13 and October 7, 1981, 69,000 firms joined the Chamber, and of those, 48,000, or nearly 70%, employed 10 or fewer people. The smallest companies, which in April made up 37% of the Chamber's total membership, by October accounted for 49%. In fact, 91% of the Chamber's member companies have fewer than 100 employees. The Chamber's membership is over-whelmingly small business -- and getting more so.
The U.S. Chamber's membership comes closer than that of any other lobby to reflecting the diversity of the American business community. But the people who set policy for the Chamber -- deciding which bills, which regulations, and which politicians the organization will support or oppose -- don't reflect that diversity.
Small business membership on the Chamber's board has grown to as many as 10, if "small business" is very broadly defined. If you count only those members who head companies doing less than, say, $50 million annually, the number drops to 6 or fewer.
Eamonn McGeady, an active Chamber member who is president of a Baltimore marine construction firm, says, "The big boys on the board just don't trust the little boys. They might do something rash." Indeed, one board member confides that "it would be embarrassing" to have "unsophisticated" small business-people sitting on many of the board's policy committees.
But McGeady sees the Chamber's emerging small business activists as "generally well educated if not wellheeled. They're not kooks. They are people who turn out to be socially acceptable. As these people earn their spurs within the organization," he says, "their performance will gradually impel them onto the board."
Chuck McDonald, president of McDonald Equipment Co. in Willoughby, Ohio, and a member of the Chamber's Council of Small Business, agrees. "You'll find that the small business voice in the Chamber will be stronger," he says. "It won't be the only voice, but that's as it should be."
Like the membership of the board, the structure of the Chamber's staff also fails to reflect the overwhelming small business membership of the organization. But here, too, change -- slow change -- is under way.
The U.S. Chamber's 400-plus-member Washington staff consists of a president, one senior vice-president, at least seven vice-presidents, there general managers, 21 managers, 63 directors, and various controllers, associate directors, special assistants, counsels, and others. Most of them work in a large stone building across the street from the White House, the inside of which is indistinguishable from dozens of government office buildings housing equally inscrotable bureaucracies. Interoffice memos sometimes take two days to get where they're going. It's the kind of organization in which executive-level bureaucrats have their secretaries telephone, then leave you dangling on hold until the boss picks up.
"They told me when I came here," says Jeff Joseph, manager of the Business-Government Affairs Division, "that it would be six months before I thought I understood how this place works and a year before I would know that I still didn't understand it."
One of those 63 staff directors, Ivan Elmer, heads the Chamber's four-person Small Business Center. It sits on an organizational tier three levels below the president's office. Elmer, a 16-year Chamber veteran, "is a gentleman and is capable, but he's an organization man who wants to stay that way," says a member who works closely with him.
Until 1976, when Elmer was put in charge of developing the just-created Small Business Center, there had been no official recognition within the Chamber's staff structure of any need to think of small business as distinct from all business. Five years later the Center remains one small part of the huge bureaucratic structure, but Chamber staffers say it's became an important base to touch. "Issue managers call me frequently to check on the small business impact of lots of issues," says Chris Russell, a congressional lobbyist for the Center.
The lay counterpart to the staff Small Business Center is the 60-member Council of Small Business, one of 18 policy committees that report to the board. Committees are headed by board members, but not all committee members hold board seats.
The council meets twice a year to vote on policy recommendations that are based on research data and information provided by Chamber staff. Those recommendations eventually get to the board, either directly or modified first by one or more of the Chamber's 17 other policy committees.
So if there's one place in the U.S. Chamber where small business activism should blossom, the council is it. Look hard and you can find the bud, but there's little bloom yet. "When we have brought up items that would make the board of directors uncomfortable, we've been asked not to pursue them," says Elaine Donaldson, executive vice-president of Donkirk Tool Supply Inc. in Convina, Calif. For example, some council members say their attempts to talk about problems created by high interest rates were discouraged, because the Chamber board strongly supports the government's tight monetary policy.
Council members seem to fall into one of two groups, Company Men and Young Turks. Frank Morsani, the chairman of the council, is definitely a Company Man. Other council members call him Father Morsani. He owns seven auto dealerships, selling mostly foreign cars, in Florida, Kentucky, and Georgia. He's a mediator who does his best to defuse confrontation. "Individual council members," he says, "will want things that the board wouldn't approve. I try to be sure we have winnable issues." Morsani sits on the Chamber board.
So does Van P. Smith, another council member, whose business interests and holdings include several industrial firms, an industrial park, a television station, and an interest in a bank. Smith, from Muncie, Ind., is also a Company Man and sees the Chamber as an "umbrella group that speaks to the needs of the entire business community." Let other organizations represent the special needs of small business and specific industries, he says; the Chamber's role is to help set broad economic directions. "Our first job," Smith holds, "is to see that the train is going in the right direction. Then you can put the windows up or down."
