Here’s what you need to know…
As the recent public debate over Georgia’s new voting law makes clear, American CEOs and corporations have been increasingly willing to make their voices heard on hot button social and political issues. While corporate activism is not a new phenomenon, the forces driving that activism have shifted to inside many firms, with employees demanding their bosses speak out and take actions, even if it hurts the bottom line.
With corporate giants such as Delta and Coca Cola issuing public statements disavowing Georgia’s new voting laws and Major League Baseball relocating this year’s All-Star Game from Atlanta, it is worth considering how we got here and what it means for public affairs professionals advising companies and industries. Especially in this hyperpolarized political environment, it is important for CEOs and companies to remember that while they may believe they are signaling the right thing, they very well may be widening the divide instead of closing it. Here’s what you need to know to navigate these debates effectively.
We’ve been in a new age of activism for a while. Companies are just catching up.
We’ve previously written about how activism “has become increasingly professionalized, digitized, and globalized.” While these efforts are not new — see the Keystone XL pipeline opponents who ringed The White House perimeter in 2011 — they increased significantly during the Trump years, with heightened expectations that companies and their leaders would weigh in on issues of the day. Companies today are meeting these expectations more than in the past. As the workforce continues to grow younger, companies must align their actions with a set of shared values and clear purpose if they hope to attract top talent. According to one survey, over three quarters of millennials strongly consider “a company’s social and environmental commitments when deciding where to work.” This rise in employee scrutiny is pushing employers to take stances on political issues they once avoided, creating new political and reputational risks even as they are intended to do societal good. Employee expectations have joined media and advocacy group pressures in thrusting companies into the political spotlight on issues ranging from social justice to the environment and, most recently, voting rights in Georgia. Not surprisingly, public affairs professionals are feeling the pressure, seeing an increase in senior executives’ interest in political and policy issues farther afield from core business needs than ever before.
CEOs are the most trusted leaders in public life. That comes with expectations.
Private businesses have become the most trusted institutions in the United States as Americans have become increasingly divided by politics. That means businesses and their CEOs can play a pivotal role in bridging this partisan divide and rebuilding the public’s trust in societal institutions. A recent study by Edelman found that 54 percent of Americans trust business more than politicians and the media. 86 percent of the respondents expect CEOs to speak out on societal challenges and 68 percent of respondents believe “CEOs should step in when government does not fix societal problems.” In fact, a Morning Consult survey found that despite growing concerns over censorship in the digital public square, Americans even trust big tech companies, such as Amazon and Google, to “do what is right” more than they trust government officials, the news media, and police officers and teachers.
However, CEOs must be aware of the risk associated with their activism. In 2018, we warned that “taking a stand inherently attracts and alienates customers depending on their view of that stance, meaning that companies need to fully understand their customers and audience before starting any corporate advocacy.” The NBA learned this reality first hand last year as it saw its television ratings plummet amidst a league wide social justice movement that weaved politics with the sport. Commissioner Adam Silver said this year “there will be somewhat of a return to normalcy,” in hopes of re-attracting fans who very well may agree with the messaging but want to keep politics out of sports. More recently, in response to Delta’s statements regarding Georgia’s new voting bill, Republicans in the Georgia House of Representatives voted to strip the airline of a tax break worth tens of millions of dollars, while Congressional Republicans have called to revoke Major League Baseball’s antitrust protections over MLB’s actions on the same issue. Whether either of these actions come to fruition, it signals to companies that weighing in on issues that divide Americans might come with a cost to the company.
Employees are engaging in their own advocacy — in and out of the office.
A recent survey found that nearly 40% of employees consider themselves “social activists” who are willing to speak out against their employers on controversial political and societal issues, even if these issues are totally unrelated from their employer’s business or industry. In January, we got a glimpse of how this willingness may evolve. Employees at Google successfully formed a minority union aimed at giving “structure and longevity to activism at Google.” This union intends to be more focused on wielding political influence than traditional union work regarding conditions of employment. The union formalizes employee pressures that have been mounting for some time. In 2018, for example, thousands of Google employees banded together in opposition to a drone-related contract the tech giant had with the Pentagon. Under this pressure, Google allowed the contract to expire the following year. Similarly, in early 2019, hundreds of Microsoft employees signed an open letter protesting the company’s $500 million contract to supply the U.S. military with augmented reality headsets.
Internal employee activism is not unique to the tech industry. In 2019, hundreds of Wayfair employees staged a walkout in opposition to the company’s decision to sell furniture to a migrant detention center and later that year, Nike employees walked out of the company’s headquarters demanding the company offer more support to female employees and athletes. When Georgia was considering a “heartbeat” abortion law, then CEO of Disney, Bob Iger, said that the company would have to reconsider future filming in the state, saying, “I think many people who work for us will not want to work there, and we will have to heed their wishes.” Iger’s sentiment is increasingly shared by corporate executives, with Judith Samuelson, director of the Aspen Institute’s Business and Society Program, predicting more “companies will begin to embrace employees as an early warning system on risk and reputation.”
CEOs need to weigh all sides before taking a stance
While showcasing purpose can strengthen a brand, companies must tread cautiously. Every action has a reaction, and in today’s highly polarized, highly attuned political environment, engaging without fully understanding the facts and the landscape can cause as much or more of a backlash than not speaking out. To stay ahead of this, public affairs professionals and their organizations must first be prepared for today’s fast moving environment by knowing their vulnerabilities and understanding the context of the issue before weighing in. While this trend of corporate activism does not appear to be slowing down, companies must be mindful that the best way forward is to remain consistent with their values and close to their stakeholders in order to avoid a full-blown public affairs crisis.