Trustbusting the Midterms

Here’s What You Need To Know

“Bring down the price … And do it now,” President Biden tweeted earlier this month, directing “companies running gas stations” to sell gasoline at cost. The demand defied logic (the majority of gas stations are independently-owned and have very low profit margins), but it did highlight how frustrated presidents can become over their limited ability to address economic headwinds hindering their party’s electoral prospects. If we have reached this level of rhetoric in early July, just imagine how heated things will get after Labor Day.

It is not just the price of gas drawing ire from elected officials feeling the heat from voters. Progressives and even more establishment Democrats are increasingly blaming corporations, from grocery stores to car companies and beyond for rampant inflation. As Congresswoman Alexandria Ocasio-Cortez (D-NY) told Yahoo! Finance, “A lot of these price increases are potentially due to just straight price gouging by corporations,” which the publication noted, “echoes comments in recent weeks from Sen. Sherrod Brown (D-OH), Sen. Elizabeth Warren (D-MA), and the White House.” Progressive voices, such as The Nation, have cheered on such claims, warning, “A failure to be blunt about profiteering leaves a void that will ill serve their party in 2022.”

While it ignores economic reality, left unchecked this rhetoric – and the accompanying policy responses – could cause lasting damage to companies and industries already struggling to hire workers, navigate supply chain disruptions, and prepare for a potential recession. Public affairs professionals cannot wait for the results of the midterms to stave off the lasting reputational and policy impacts. Here’s what you need to know to take action now.

Profiteering Claims Aren’t Just Rhetoric – They’re Driving Policy Action

Blaming business for economic woes isn’t limited to rhetorical gestures—it’s manifesting itself in an agenda that is being pushed by the President, his appointees, and members of his party in Congress.

Anti-Trust Laws: Last year, President Biden was already laying the groundwork for Democrats’ midterm arguments, directing federal agencies to take investigative action to rein-in corporations, urging direct government intervention in a wide array of industries ranging from meat and poultry to oil production and announcing 72 new antitrust initiatives targeting a dozen industries. Many of these initiatives are being led by financial regulators who have a record of hostility towards the private sector that The White House nominated.

Presidential Appointments: The seeds of the current regulatory environment were sown with appointments made by Biden upon becoming President, including: Lina Khan, Chair of the Federal Trade Commission; Rohit Chopra, Director of the Consumer Financial Protection Bureau; and Jonathan Kanter, Assistant Attorney General of the Department of Justice’s Antitrust Division. All three have pursued a more aggressive approach to regulating firms.

Wage and Price Controls: In charging that companies are price-gouging, some Democrats are considering price controls as a remedy. In May, the House passed a bill banning “excessive” gasoline prices. Senator Bernie Sanders (I-VT) and five Democratic members of Congress have introduced legislation that would impose tax rate increases on companies with CEO to median worker ratios above 50 to 1, while some have called for implementing a maximum wage.

Ending Stock Buybacks: In April, Senate Democratic Leader Chuck Schumer (D-NY) and leaders of the House Oversight and Reform Committee demanded executives of major oil and gas companies stop stock buybacks and dividends to provide relief at the pump. Of course, suspending buybacks and especially dividends could make it even harder for oil companies to attract the capital required to fund expensive drilling programs that generate more oil. Beyond the energy sector, there had previously been a push among some Democrats to ban stock buybacks entirely.

What’s Really To Blame for Economic Woes?

As we wrote in May, in addition to Russia’s invasion of Ukraine, growing demand post-pandemic and difficulties faced by oil producers in ramping up output have been contributing to an upsurge in gas prices. Beyond the pinch at the pump, there are several factors driving inflation:

  • Monetary Policy. The pandemic spurred unprecedented levels of stimulus spending, introducing trillions of dollars of cash into the American economy that would not be circulating under normal circumstances.
  • New Spending Habits. After receiving stimulus payments and accumulating cash savings during the pandemic, American consumers now have greater purchasing power that is accelerating consumer spending.
  • Supply Chain Issues. Even as Americans want to buy more products, they are unable to do so because the supply chain can’t produce and deliver enough of them. Producers must contend with skyrocketing prices for materials, labor, fuel costs, and shipping, ultimately weighing production costs with guesses on future consumer demand.
  • Shrunken Workforce. America’s labor market is still recovering from the pandemic. Meanwhile, the federal government continues to extend eligibility for social safety net programs like Medicaid, food stamps, and unemployment insurance, which some scholars argue deters workforce reentry.

Despite Democratic focus on corporate profits, many economists, including those aligned with past and current Democratic administrations, say the price-gouging and antitrust zeal fails to understand the true nature of the inflationary spike, which they say are more a product of market forces and government policies than corporate greed.

As the Midterm Rhetoric Heats Up, Public Affairs Professionals Must Be Ready

Faced with unhappy constituents frustrated with the party in power, Democrats in Congress and the Biden Administration hope to refocus the conversation on “Big Business” profiteering, and no industry or company will be safe from scrutiny. That means public affairs professionals must be armed with the facts necessary to make their case to the public and policymakers about the current economic reality. Otherwise, damaging ideas based on false premises can gain traction and set the terms of debate for future policy proposals. The right competitive intelligence can equip public affairs professionals with the tools they need to anticipate and address such challenges with calm and confidence.

Forbes Column: Do You Know How Government Is Impacting Your Business?

In his latest Forbes column, Delve CEO Jeff Berkowitz outlines how an ever-changing legislative and regulatory landscape can have a significant impact on your business. To learn the key actions that keep you ahead of change, read the except below, then head to Forbes.com to read the full article.

From mom-and-pop shops on Main Street to Fortune 500 companies trading on Wall Street, the last two years of the pandemic have made clear just how much government action (or inaction) can determine whether and how businesses can operate and grow. That reality was made clear by the frequent changes to Covid-related rules by officials at every level of government, from The White House and U.S. Supreme Court to governors and even city councils. This volatility forced businesses to constantly adapt to ever-changing guidance and regulations, from shutdowns to vaccine mandates to masking ordinances and beyond. Even as we move beyond the pandemic, businesses must remain cognizant of just how much influence elected (and unelected) officials have on their business operations.

Such government involvement is not new or unique to the pandemic. In some places, its intervention is obvious, such as permitting processes under the National Environmental Policy Act or labor rule disputes at the National Labor Relations Board (NLRB). In recent years, however, governmental scrutiny has compounded, and businesses must increasingly consider the role that lawmakers and regulators have on less obvious day-to-day functions of their business, from pressuring corporations on their boards’ demographic makeup to licensing rules that come with costly repercussions.

At every turn, the government is adopting policies that affect businesses, industries and sectors. Whether your organization is large or small or your industry niche or broad, you may have significant policy challenges that make operating your business more difficult, more time-consuming and costlier. That means you need to stay ahead of government actions, so you can help shape policy in a positive way.

Continue reading at Forbes.com and find out three key actions to help your business manage a growing and complex web of governmental influence.

The Roe Dilemma

Here’s What You Need To Know

Amidst the uproar over the leaked U.S. Supreme Court draft opinion in Dobbs v. Jackson that could determine the fate of Roe v. Wade, companies face pressure from competing stakeholders to take a public stand. Whatever position they take—or even if they stay silent—is bound to alienate one or even both sides of this charged debate. Yet, news of the draft decision is just the latest social issue flashpoint in which companies are caught in the crosshairs, with questions, concerns, and demands coming from employees, consumers, investors, elected officials, and beyond.

Public affairs professionals know threading this needle will be difficult. As we’ve warned before, “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 this ongoing challenge smartly…

The Demand To Take a Stand

The leaked draft caused a wave of activism demanding and expecting companies to act. Some companies, including Amazon, Apple, Citigroup, Levi Strauss & Co., Lyft, Salesforce, Uber, and Yelp, swiftly adopted new employee benefit packages covering the travel costs of employees seeking abortion procedures. The moves come in response to pressure from not just outside activists but also employees within companies. The pressure, though, is not one-sided. Congressional Republicans, for example, were already pursuing cancellation of Citigroup’s contract to provide payment services for House offices over the bank’s plans to cover abortion travel for workers.

Companies must also contend with the fact that younger consumers—an influential demographic sought by many companies—expect companies to speak out on important social issues, including abortion access. Those consumers claim to be more likely to patronize businesses that openly share their values. Investors are likewise seeking companies committed to social impact, including pledges on abortion rights and similar social issues. In February, a group of 36 investors managing $236 billion in holdings sent a letter to CEOs of more than thirty companies requesting they disclose their stances and employee benefits related to reproductive healthcare.

Every Action Has a Reaction

The desire to respond quickly to the leaked draft may be driven in part by corporate executives who just watched The Disney Company’s CEO forced by employees and activists to belatedly speak out regarding a Florida sex education measure. Yet, the second half of that all-too-true fable is just as important a lesson. In response to Disney’s opposition to the measure, the Florida legislature empowered Governor Ron DeSantis to revoke Disney’s special operating privileges in the Sunshine State. Similarly, when Delta spoke out against a Georgia election law, state House Republicans passed a bill stripping Delta of a jet fuel tax break.

As we noted after Texas passed a contentious abortion law last year, this “new reality means trying to get along with the leaders who enact policies that are good for business while placating the activists whose agitation isn’t, or finding ways to speak up for important values without blowback from elected officials.” Indeed, as we saw with Disney, such blowback is no longer just coming from politicians, but also from consumers who do not share the more vocal protestors’ views. After all, Americans remains split 50-50 on whether firms should address this issue.

This Isn’t Going to End Any Time Soon

Last week, the U.S. Department of Homeland Security circulated warnings to corporate leaders “flagging the potential for civil unrest” once a ruling in Dobbs becomes official. The potential for extreme rhetoric, violence, and destruction means companies will have to be careful in how they respond to the ruling, and if or how they associate with various advocacy groups that could be implicated—fairly or unfairly—to disruptions.

In the longer term, companies’ response to this anticipated decision are likely to be scrutinized to see if their practices match their proclamations. For example, how many companies will now cover employees’ travel for an abortion but not for critical cancer care or other complex health issues? The potential for such questions regarding companies’ real commitment to women’s health is a future viral moment waiting to happen. In addition, a decision dismantling Roe in whole or part will lead to a lengthy state-by-state battle, with Republican-led states emboldened to restrict abortion and Democratic-led states encouraged to protect and expand access. This widening legal divergence will undoubtedly foster tensions between companies and state governments. Even at the federal level, firms have to consider that Democrats’ current hold of the reins of power may end in November, and Republicans are already planning their investigations.

Abortion laws also are not the only social issue companies will face pressure to address. From voting laws and sex education to transgender rights and critical race theory in public schools to issues not yet ripe for politicization, stakeholders and policymakers will crank up the heat on firms to take a stand even as they remain divided over what that stand should be.

Conclusion

While the Dobbs leak provided little time for companies to react, public affairs professionals must anticipate the pressure campaigns to come. As crisis communication guru Richard Levick warned last week, “Taking sides on the most problematic issues of the day may not be advisable, but it may also be unavoidable.” At Delve, we recommend firms “take a cohesive approach that aligns their brand strategy and policy stances … assess[ing] risk from both a global and local perspective so that you can better understand and address key vulnerabilities—before they are pointed out in the public arena, and before you lose control of the narrative.”

Forbes Column: Are You Ready to Launch Your Brand’s Social Impact Initiative?

Social impact is more than a buzz word. For growing numbers of organizations, it’s an operational principle. Yet the public remains skeptical that businesses mean what they say on such issues. In his latest Forbes column, Delve CEO Jeff Berkowitz outlines how organizations can make a real commitment to social impact without any surprises, and what a failure to fully consider such initiatives through can mean for an organization. Read the except below, or head to Forbes.com to read the full article.

With brands taking greater leadership roles in society, they’re now expected to engage on a wider range of issues, including those not directly related to their business. A variety of stakeholders will encourage an organization to lead with social impact as much as they do the products they make or the services they provide. Employees, investors, advisers, community activists, policymakers and even executives see how critical dedication to shared social values can be not only to a company’s corporate culture but also to its bottom line.

In a deeply divided nation, such corporate activism can present challenges to organizations once reticent to take public stands on contentious issues but now thrust into today’s political and social debates. As Axios reported, a recent survey warned about “the danger of speaking out impulsively on issues that aren’t core to the business.” According to Fox Business, the survey found that while 63% of corporate executives think “companies should speak out on social issues,” just 36% of voters agree. Even worse, only 39% of voters think corporate communications of social issues is effective.

Here are three practices executives must adopt to shape their organization’s social impact in a thoughtful and authentic way that minimizes risks and increases the likelihood their efforts will be well-received: (1) Know your history before you engage. (2) Don’t sign up for principles before you understand their implications. (3) Actions speak louder and longer than words.

Continue reading at Forbes.com and learn why these three practices are crucial to social impact success.

Forbes Column: Are You Prepared for a Communications or Reputational Crisis?

It may not always seem it on the surface, but political and reputational risks exist in every organization. In his second column as a member of the Forbes Business Council, Delve CEO Jeff Berkowitz explains why organizations need to be prepared to anticipate and mitigate a communications or reputations crisis before it happens, because once the viral moment hits, it will be too late. Read on to learn more.

It’s the day you have long feared. You wake up to frenzied phone notifications and emails from colleagues and questions from reporters. Your viral moment has arrived. Someone said or did something — now or years ago — and your organization is under siege from the press, public, shareholders and policymakers.

Today, it’s no longer a matter of if your viral moment will happen, but when. That’s because companies are made up of people, and people make mistakes — both in their work and personal lives. Sometimes, no one does anything wrong at all, and the blowback is seemingly unjustified. No matter the circumstances, your viral moment is inevitable.

So, as the old adage goes, “by failing to prepare, you are preparing to fail.” That’s why organizations must invest time and resources before something bad happens. Smart companies are doing so by applying the same kind of competitive intelligence they leverage elsewhere in their business to build a public affairs toolbox that ensures they can respond quickly and effectively to any viral moment.

Continue reading at Forbes.com and find out the three steps executives should take to protect their brand from an unexpected uproar.

Delve’s New E-Book: Everything Public Affairs Professionals Need To Know About the Infrastructure Bill

Download the Infrastructure E-book

A Message from Delve’s CEO, Jeff Berkowitz

After years of “Infrastructure Weeks” and months of legislative jockeying, Congress is poised to send a bipartisan infrastructure package to President Biden’s desk. Like many such bills, its passage represents countless hours by Members of Congress and their staff, along with pressures and encouragement from a wide range of outside interests. Last fall during the presidential transition, we outlined the bipartisan opportunities offered by an infrastructure bill like this one, and each of those is represented in the final package.

Yet, even as champagne gets chilled at both ends of Pennsylvania Avenue and up and down K Street, smart government affairs professionals realize passage is just the end of the beginning, not the beginning of the end. Particularly with legislation so historic in both size and scope, signing the bill merely passes the baton from Congress to federal agencies, and in many cases, state and local governments and private sector partners.

That reality means government affairs professionals must work with public officials to ensure favorable regulatory conditions for their projects, priorities, and industries, because their opponents are already engaging in these fights, and a variety of stakeholders will likely need to buy in before the project proceeds.

To understand the fights spawned or compounded by this bill, our analyst team dug deep into what comes next, as we always do for our clients. This report provides a brief overview of ten public affairs challenges and opportunities across a range of industries that will unfold as this bill goes from legislative language to real world implementation.

While passage is a great success for government affairs professionals, Congress, and The White House, for both the winners and losers in this bill, the fight will go on. It is our hope that this report helps prepare you and your organization to stay ahead of the curve. As you do, please reach out – we’re here to help.

Thank you for reading,

Jeff Berkowitz
CEO
Delve

From Europe, With Disappointment

Here’s What You Need To Know

Contrasting himself with then-President Trump’s “America First” diplomacy, Joe Biden pledged during the campaign to strengthen America’s alliances to “address the most urgent global challenges.” Then-campaign advisor and now Secretary of State Antony Blinken said Biden’s foreign policy “means engaging the European Union instead … treating it like it’s an enemy,” promising Biden would “bring to an end [Trump’s] artificial trade war,” and “rebuild strong ties with the European Union.” As President-elect, Biden underscored these commitments in a call with European leaders, vowing to “deepen and revitalize the US-EU relationship.”

These overtures from the Biden campaign was met with resounding anticipation, with the former French Ambassador Gerard Araud calling the prospect of a Biden victory as “orgasmic” for Brussels. London-based Business Insider reporter Thomas Colson boldly prognosticated that a Biden win in 2020 would, “repair most of the damage Trump has done to America’s historic alliance with Europe.” There were high hopes for an end to so-called trade wars with Europe, as well as greater financial investments in Europe’s security.

Yet eight months into the Biden Administration, some analysts may be wondering if Biden is actually the most Eurosceptic president in recent American history. From reinstituting a travel ban on European visitors to a bungled Afghan departure and beyond, transatlantic tensions have intensified, reaching a crescendo with the controversial AUKUS submarine deal earlier this month. For organizations counting on stronger transatlantic ties, the unexpected turmoil poses unique challenges for both day-to-day operations and long-term growth. Indeed, even where the two sides of the Atlantic appear to be cooperating, the policy direction may hurt rather than help. Here’s what public affairs professionals need to know to help their organizations navigate the turmoil.

The Biden Administration’s Action Have Not Matched Campaign Promises – Or European Expectations – For a Strengthened Alliance

BAD BAN: When President Joe Biden took office, he reinstituted a travel ban on visitors from most European nations, regardless of an individual’s vaccination status and with very few diplomatic or commercial exceptions, even though individuals from nearly 170 other nations could visit America, regardless of their country’s COVID-19 situation or vaccine campaign efficacy. After Europe lifted its restrictions on vaccinated or negative-testing American travelers, they expected the U.S. to reciprocate. In the several months that followed, President Biden wouldn’t budge, leaving European leaders furious and triggering a deluge of public statements from ambassadors, national leaders, and EU chiefs emphasizing how damaging the Biden Administration’s decision was to U.S.-Europe relations, international commerce, and the millions of families kept apart for nearly two years. While Biden finally ended the ban last week, the damage had already been done.

AFGHANISTAN FALLOUT: Despite broad international criticism, President Biden has remained defiant about his decision to end a U.S. presence in Afghanistan. The chaotic departure has infuriated European allies – in particular, France, Germany, and the United Kingdom – who have made long-term troop and financial commitments to support U.S. efforts in the region and expected Biden to strengthen, not surprise, the NATO alliance. In mid-August, the British Parliament held President Biden in contempt over the messy withdrawal, while Europeans openly discussed whether they can still rely upon the United States as a partner in global security. “There was a time when the U.S. talked about upholding the global order,” Sweden’s former Prime Minister Carl Bildt told the BBC. “But that is not the language now coming out of the White House. Expectations for a revival of the transatlantic relationship have been deflated. And one is resigned to an America that does it its own way.”

LAFAYETTE, NOUS NE SOMMES PAS DÉSOLÉS: The U.S.-EU relationship deteriorated further after the Biden Administration “torpedoed a multibillion-dollar French submarine deal with Canberra,” with the French insisting they were left in the dark about the incoming hit to one of its most prized industrial products until it became public. The French were so angry, in fact, that they recalled their ambassador from Washington to Paris – one of the deepest cuts in America’s longest alliance dating back to the American Revolution. Even as President Biden attempted to smooth things over by lifting the travel ban, Europe isn’t forgetting the slight anytime soon. The EU delayed the first session of the U.S.-European Trade and Tech Council planned for September 29th, and EU Internal Market Commissioner Thierry Breton suggested, “It is probably time to pause and reset our EU-U.S. relationship.”

WAIVER-ING RELATIONSHIP: These missteps in the U.S.-EU relationship are not recent. Back in February, the Biden Administration caught European officials by surprise when it endorsed efforts at the World Trade Organization to provide waivers on COVID-19 related intellectual property protections. Meanwhile, Speaker Nancy Pelosi (D-Calif.) is sending signals to London that, should Prime Minister Boris Johnson interfere with a Northern Irish peace process, it would hinder his ability to secure a post-Brexit trade deal. And allies in Central and Eastern Europe were disturbed by the Biden Administration’s abrupt decision to withhold sanctions against Russia’s controversial Nord Stream 2 pipeline project. With so many developments in a short eight months in office, it is no surprise European Council President Charles Michel expressed disappointment, noting Biden had declared, “America is back. … What does it mean … Is America back in America or somewhere else? We don’t know … We are observing a clear lack of transparency and loyalty.”

Transatlantic Tensions Add Challenges for Companies in This “New Era” of U.S. Diplomacy, but So Does Cooperation

NAVIGATING A NEW ERA OF UNEXPECTED TENSION: Last week, President Biden gave a speech at the United Nations where he outlined his vision for a “new era” in U.S. diplomacy. Yet while the Council on Foreign Relations once lauded the President Biden and Secretary Blinken as “confirmed Atlanticists” eager to re-engage with Europe on initiatives like the Paris Agreement and World Health Organization, the economic picture remains unclear. The state of trade wars, once portrayed as relics of the Trump Era, are no longer the exclusive sign of the health of America’s economic relationship with Europe. For public affairs professionals, the Biden Administration has not turned out to be as predictable on transatlantic affairs as experts once hoped.

COOPERATION BRINGS COMPLICATIONS OF ITS OWN: Even areas where there is cooperation between the U.S. and Europeans do not bode well for companies. From anti-trust crackdowns to global minimum taxes to carbon reduction initiatives, this collaboration can be just as much a source of angst among companies that expected Biden to get the U.S.-Europe relationship “back on track.” Now, corporate public affairs professionals must juggle what’s happening with Washington, Brussels, and London – and Paris, Vienna, and Berlin, too. With this expansion in what developments in which jurisdictions can impact their interests, companies will need sharp competitive intelligence efforts to make sense of it all.

Under Pressure

Here’s What You Need To Know

Texas’ recent law restricting abortion is not just the latest flashpoint in the long running culture war. It is also the latest example of the growing pressures and expectations facing corporations in an increasingly divided America. Until recently, companies and coalitions avoided public policy fights outside of those that affected their “bottom line.” Now, apolitical organizations are expected to become political, even when it seems to make little sense to get involved. For activists, inaction on any particular policy is essentially an endorsement of it, so they demand companies of all shapes and sizes take stands on hotly contested issues ranging from abortion access to election law, and vaccine mandates to gender identity issues.

As more companies decamp for more business-friendly policy environments in Republican-led “red” states, they are realizing that conservative policy isn’t limited to economics. That’s leading to added pressure from highly motivated, well-organized, and well-funded activists unwilling to accept anything less than complete and enthusiastic alignment with their point of view. For public affairs professionals helping companies navigate these competing pressures, this new reality means trying to get along with the leaders who enact policies that are good for business while placating the activists whose agitation isn’t, or finding ways to speak up for important values without blowback from elected officials.

To understand how we got here and why such challenges are unlikely to go away anytime soon, here’s what you need to know.

Organizations Are Emigrating To “Red States” for Pro-Business Policies

RED STATES RISING: Many Republican-led states have enacted business-friendly policies to recruit top companies. These organizations are enticed by low tax rates, minimal regulations, and favorable labor laws, while their employees appreciate the quality of life and low cost of living. States like Texas, Tennessee, and Florida – all with no state income tax, affordable housing, and agreeable weather – have seen population booms and robust economic growth in recent years. Even tech organizations like Tesla, Oracle, and HP aren’t shying away from reaping the benefits of a conservative state like Texas, happy to intensify the blue dots in red states as they flock to cities like Austin. They’re also moving to communities like Atlanta and Salt Lake City, eager to take advantage of those states’ overall business climate while adding their own urban flair.

BLUE STATES BLEEDING: As America’s largest state and one of the world’s largest economies, California had lots to offer businesses. Yet its high tax rates, labor policies, abundant regulations, and other positions on a variety of issues are driving companies out. According to the Hoover Institution, CEOs rank California as having the country’s worst business environment. Years of these policies have led businesses to head to friendlier climes, including Florida, which “welcomed a net inflow of 4,811 ex-Californians between 2018 and 2019” alone, according to Patrick Gleason of Americans for Tax Reform. California is not alone, either. Like the snowbirds before them, New Yorkers are migrating south – this time for work. Big names like Goldman Sachs and Jet Blue are heading there, according to the Partnership for New York City, while financial firms like Elliott Management, Citadel Group, and Blackstone are moving tens, if not hundreds, of billions of dollars to the Sunshine State. Next door in New Jersey, 70 percent of CPAs have advised their clients to relocate elsewhere due to the region’s high cost of doing business, especially its tax rates.

Businesses Are Caught Between Competing Political Agendas

THE FACTS OF (POLITICAL) LIFE: While corporations appreciate the benefits of operating in Republican-led states, conservative policy isn’t limited to economics. For some companies, they must take “the good” (an attractive business climate) with what they see as “the bad” (socially conservative laws). For some industries, the delicate balancing act is worth it. But, as state governments take an increasingly active role in addressing causes of social concern for their constituents, that’s becoming more difficult.

ACTIVISTS EXPECT A RESPONSE: In a hyper-politicized, highly digitized world, companies have to worry more and more about activist pressures from both within their own organizations and outside of them. Every issue, no matter how ungermane to their day-to-day activities, could be a lightning rod for activists’ fury. And now more than ever, these activists have plenty of time, resources, and motivation to keep the pressure on. Unlike C-suites, activists aren’t concerned with how a state’s economic policies are creating jobs or profit. Instead, their goal is to make life as difficult as possible for organizations with the wrong political opinions or who choose not to speak out. It doesn’t matter if you’re Jeff Bezos, running one of the world’s largest companies that employs millions and adds trillions to the economy or a small business owner trying to make ends meet. You’re still expected to speak out on immigration policy or whatever politically charged debate has crossed activists’ radar at a given moment.

BUT ACTIONS CAN CAUSE BACKLASH: Even with mounting activist pressure, organizations can’t simply advocate against GOP policies in states where they operate without facing blowback. When companies like Delta took a public stand against a new voting reform law passed by Georgia Republicans, lawmakers retaliated against the Atlanta-based airline by voting to strip them of tax breaks worth tens of millions of dollars annually. Peach State GOPers responded similarly in 2018 when they pushed back on Delta dropping its National Rifle Association discount by killing its jet-fuel tax cut that had previously saved the company about $40 million. And as a populism-tinged skepticism of corporations takes hold of many Republicans, a growing number are unwilling to sit quiet when companies, pushed by activists, take antagonistic positions against them.

Public Affairs Professionals Need To Keep Two Very Different Sides Happy

BEND UNTIL THEY BREAK: From apologies to executive shakeups, companies will keep bending to activist demands to protect their standing with consumers or employees. The question is how much. CEOs feel they have a responsibility to their stakeholders to speak out on controversial issues, and their voices matter, since they’re still among the most trusted leaders to impact social change. In some cases, activist-driven corporate pressure has changed laws or thwarted enactment of new ones. When North Carolina moved to enact a transgender bathroom bill, Deutsche Bank and PayPal announced they would no longer expand in the state, while the NBA threatened to cancel its All Star Game plans. The state ultimately relented.

THREADING THE NEEDLE: For many corporate leaders, the goal is to do just enough to show they have the right social opinions without upsetting elected officials they need to maintain a positive economic environment. As Texas implements its new abortion law, even typically vocal companies, like SalesForce, are carefully balancing their response, offering employees relocation bonuses to work from California but avoiding broader comments on the law. Meanwhile, rideshare companies are providing legal coverage for contractors, and one, Lyft, is contributing a sizeable donation to Planned Parenthood. And some tech companies are even starting abortion funds for their employees. Yet few, if any, have any plans to push back against the law, and none of them have decided to leave Texas. Meanwhile, some of the state’s biggest corporations – Apple, AT&T, Dell – are staying quiet.

PUBLIC AFFAIRS JENGA: Getting caught amidst the culture wars poses unique and growing challenges for public affairs teams. They must protect their firms’ economic interests while placating an increasingly-activated consumer and employee base who are sometimes not aligned with Republican values on social issues – not to mention a narrative-driven national media that has little sympathy for conservative policy initiatives. To stay out of the fray – or engage in a thoughtful way – public affairs professionals need the right insights to understand who all their stakeholders are and how to anticipate their expectations when issue debates get heated.

Forbes Column: Is Your Company Culture a Political Risk or Opportunity?

In his inaugural column as a member of the Forbes Business Council, Delve CEO Jeff Berkowitz notes that while we often think of political and reputational risks as coming from external forces, that is not always the case. The culture you build in your company can have a real impact on your company’s brand, reputation, and policy interests. Read on to learn more.

When Basecamp CEO Jason Fried shared a memo that prohibited political discussions at work, the headlines to follow caught the attention of many and were, arguably, every business leader’s nightmare. The news quickly spread across the internet, and even a member of Congress tweeted a response critiquing the company’s new policy. The uproar might not have been the intention, but in the weeks that followed, roughly one-third of the staffers at the tech firm accepted buyouts if they did not support the new restrictions. Among those exiting the company were the heads of customer support, marketing and design.

As someone who specializes in assessing political and reputational risks, this news immediately caught my attention. But, as a skeptical news consumer, I dug deeper to understand what was really happening beyond the flashy headlines and social media chatter. According to The Verge, the directive came in response to employee discussions that “centered on what is happening at Basecamp.”

So, what was causing such an employee uprising that the founders felt the need to shut down the discussion? Some employees sought a reckoning over a practice by the company’s customer service representatives to keep a list of users with names “they found funny,” some of which were Asian or African in origin. Employees pushed for more and broader discussions on diversity, inclusion and equity, and “after months of fraught conversations, Fried and his co-founder, David Heinemeier Hansson, moved to shut those conversations down,” the Verge reported. Outside the company, many piled on what they believed was the insensitivity with which the company treated important social issue discussions.

With the workplace — at Basecamp and beyond — caught in the middle of this fraught debate, there is an important lesson.

Continue reading at Forbes.com and find out the three fundamental practices business leaders should focus on to ensure their corporate culture that can withstand the headlines and scrutiny when crisis strikes.

The Great Compromise May Be Dead

Twenty years ago, a newly inaugurated President George W. Bush faced an evenly split Senate, a slim House majority, and volatile public sentiment after a hotly contested, divisive election result. Securing legislative victories would require bipartisanship and compromise, American traditions dating as far back as The Great Compromise – negotiated over the 4th of July weekend of 1787 – that shaped the U.S. Constitution.

Today, President Joe Biden faces a very similar political landscape. Yet the media, who once exalted compromise as a virtue, now treats it as a deterrent to progressive aims. This new narrative has emboldened the most leftward partisans of the Democratic Party, who are convinced they enjoy a mandate that is not evident in the makeup of this Congress or the voting coalition that elected Joe Biden.

For companies and industries seeking compromises borne out of bipartisanship to advance their policy priorities, this landscape is fraught with challenges. Central to those challenges is the question of whether bipartisan compromise can survive in the age of polarized 24-hour news and social media punditry. If it cannot, what does that mean for public affairs professionals trying to navigate Washington’s morass for their organizations and clients? Here’s what you need to know.

The Media, Who Once Celebrated Moderates as Mavericks, Now Portray Them as Roadblocks to Progress

Throughout most of political history, the public and the press have expected elected officials to set aside ideological differences to deliver real results for their constituents and the country. When government is closely divided, this bipartisanship often takes the form of opposition to the majority’s policy proposals and seeking to temper its more partisan impulses.

President George W. Bush discovered this reality firsthand as he tried to advance his agenda. At that time, the media cast his attempts to score legislative victories as extreme while pushback from his own party was sensible, civic-minded, and even brave. When Vermont Senator Jim Jeffords switched his political affiliation from GOP to Independent, he earned glowing media coverage that warned Republicans their pursuit of GOP priorities was alienating moderates. Meanwhile, Sen. John McCain (R-Ariz.) garnered media favor for his independent streak that imposed political obstacles on the new Republican president.

For the past two decades, the media have openly pined for a “radical center” built by the “moderate middle” of “politically homeless” who they say simply seek solutions to the problems facing our country. They heaped praise on the various bipartisan “gangs” who crossed party lines to solve big problems facing the country, and in 2020 argued disaffected Americans eschewed the divisive tone of the Trump Administration for then-candidate Biden’s message of unity and a return to normalcy.

Then Democrats’ narrow 2020 electoral victories left the fate of President Biden’s agenda in a 50-50-split Senate with two moderate Democrats: Sen. Krysten Sinema (D-Ariz.) and Sen. Joe Manchin (D-West Virginia). Once revered as honorable and constructive, moderation, standing athwart the Democrats’ agenda, is now reviled as obstinate and regressive. When Sen. Manchin indicated he would not support progressives’ proposed overhaul of federal voting laws, one liberal commentator accused him of upholding “white supremacy” as a “cowardly, power-hungry white dude,” while The Washington Post’s Eugene Robinson called him a “villain” for refusing to eliminate the filibuster. Sen. Sinema has endured similar derision, with The New York Times lambasting her for standing in the way of “major legislation,” arguing that while her predecessors took courageous stands in the tradition of compromise, Sinema merely “delights in trolling” her fellow Democrats, void of any discernible principles.

The Media Keeps Advancing the Narrative of a Progressive Mandate, but Congressional Math and Biden’s Electoral Coalition Suggest Otherwise

This new media depiction of bipartisanship as a bug, rather than a feature, of democracy is built on the premise that progressives have a governing mandate from voters. Yet that is simply not the case. The U.S. Senate is split evenly, while Democrats have the slimmest House majority in two decades – just nine seats. While Biden won the presidency, many Democrats considered the 2020 elections a “failure,” with voters who rejected President Trump also rebuffing candidates who promoted the Democrats’ most leftward policies.

Critics say the media live in a progressive social media bubble that inoculates them from genuine voter sentiment, even within the Democratic Party itself, with election analysts noting platforms like Twitter are largely unrepresentative of mainline Democrats. That bubble gives “Very Online” reporters and commentators a poor understanding of what actually moves voters and those who represent them. This warped view of electoral reality makes it harder for the agenda-setters of the political media to accurately assess the landscape in front of them. Indeed, the moderates they decry, like Sens. Sinema and Manchin, actually better mirror the overall electorate (as well as a significant swath of Democrats) than the progressive voices the media regularly insists Biden must appease.

Industries Hoped Democrats’ Slim Majorities Would Foster Productive Bipartisanship, but They Got Big Demands From Progressives Instead

The media narrative of a progressive mandate may not match up to governing reality, but it has not stopped liberal Democrats from pushing their party ever leftward. Their policy wish list is long and it is, by most accounts, far outside the political mainstream. These days, they are advocating for major legislative overhauls like the Green New Deal and student loan cancellations. While the Congressional Progressive Caucus promises “sweeping, transformative change,” it seems that neither their Democratic colleagues nor the voters are seeking such extremes.

Neither is the business community. When a governing majority is incredibly slim, as it is now, industries desire the productivity and reliability that bipartisanship and moderation provide. In contrast, intense political polarization often creates instability that industries try to avoid. No matter who is in power, there are still major policy problems and big legislative priorities that businesses need addressed.

Look no further than the full court press from public affairs professionals across a variety of industries on the infrastructure spending package. As we noted during the transition, this issue could “be Groundhog Day for obstruction or Ground Zero for compromise,” depending on how the parties approached it. While industry representatives are pushing moderates on both sides of the aisle to find a compromise, they more overcome an increasingly antagonistic media tone toward the very lawmakers whose support is crucial for success. With significant policy challenges on topics ranging from health care to energy, businesses are hoping that Democratic leadership and The White House will ignore calls from progressives to abandon bipartisanship in exchange for advancing an activist-oriented agenda. To convince them to do so will require challenging the accepted wisdom in the media and overcoming widely-reported (mis)perceptions of reality.