Adjunct Professor Alison Taylor wrote an op-ed for Harvard Business Review on how CEOs should handle communications on sensitive socio-political issues.
CEO activism, the growing trend of top executives speaking out on sensitive social and political issues, has been labeled the “new normal.” But behind the scenes, executives do not feel in control. They are struggling to anticipate and respond to intensifying pressure from the public, investors, and — above all — their employees.
There are conflicting views of how CEOs should proceed. One survey suggests the public wants chief executives to lead on social change without waiting for the government to act. A separate survey shows public support for corporate engagement on such issues as sexual harassment and equal pay — though not on gun control or abortion. A third survey indicates that brands may be punished for even mentioning President Donald Trump, regardless of whether they are being critical or complimentary.
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Companies must consider values, not just shared value. Most companies prefer to prioritize their business interests in line with both fiduciary duty and the shared value approach to corporate responsibility, which connects business success with social good. This would suggest that companies should act only when there is a clear business case and an opportunity for direct action. For example, most would assume that it’s easier and more effective for the CEO to cut a company’s climate emissions than to take a stand on immigration. A CEO could be forgiven for thinking it’s safest to only weigh in on political issues that affect operational and strategic goals, industry dynamics, or a company’s regulatory and policy landscape.
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Employees are now a company’s most powerful interest group. In many ways, corporate power seems to be high: Companies prioritize shareholder value; union membership rates are at an all-time low; employment contracts for some jobs include nondisclosure clauses as standard features; certain sectors of the workforce are moving toward gig economy jobs with diminishing hourly rates and no health care; other sectors are facing unemployment as jobs are automated. So why are leaders responding so readily when employees pressure them to demonstrate integrity? Workers are freely using the tools of this hyper-transparent era — including petitions and email leaks — to land punishing blows against corporate reputations and finances, in the process emerging as companies’ most powerful interest group. At a time when the U.S. economy seems to be approaching full employment, employees have more influence over whether and how their leaders speak out.