The latest partisan issue: Whether CEOs should speak up on social issues

If America’s high-profile CEOs didn’t already realize they can’t win by taking public positions on controversial issues, they certainly realize it now. Trouble is, they also can’t win by declining to take positions. The corporate public relations crisis surrounding Georgia’s new election law is just the latest example of the quandary CEOs face, this time with a new element. Democrats attacked the new law as an attempt to suppress voting, especially by Black voters, and called on major businesses to denounce it. Leaders of major Georgia-based companies, notably Delta AirLines CEO Ed Bastian and Coca-Cola chief James Quincey, did so after activists organized boycotts; Major League Baseball pulled the All-Star Game out of Atlanta. Some Black leaders said the response was too little, too late.

Then the new part: Senate Minority Leader Mitch McConnell, the highest ranking Republican in America, leader of the traditional party of business, lit into the companies that had condemned the new law. In a scorching statement, he complained that “parts of the private sector keep dabbling in behaving like a woke parallel government.” Ominously, he added that “corporations will invite serious consequences” if they keep it up. He didn’t mention MLB moving the All-Star Game but seemed to have it in mind when he accused businesses of “economic blackmail.”

What a spectacle—both parties trying to strong-arm CEOs. Result: Those who spoke out achieved the rare feat of being reviled simultaneously by the left and the right. That is the new reality, especially for big companies with consumer-facing businesses. It didn’t start with the Georgia election law, and it won’t change anytime soon. Two elements of this new reality are at its center. First, from a pure business perspective, this isn’t about boycotts, which almost never work; it’s all about employees. Second, if CEOs feel as if they just can’t win in these situations, they’re right. The world has changed.

Like most big changes, this one has been gradual, then rapid. A pivotal figure was and is Salesforce CEO Marc Benioff, and a pivotal year was 2015. That’s when corporate reputation strategist Leslie Gaines-Ross, then with the Weber Shandwick communications firm, identified a new phenomenon: CEO activism. “Before that, CEOs would never speak up about hot-button issues,” she recalls. But in 2015 Benioff attacked an Indiana law that would have permitted companies to deny service to LGBT individuals. Other business leaders, including Apple’s Tim Cook and PayPal’s Dan Schulman, began speaking up. In 2016 Benioff led a campaign—joined by Apple, Disney, Dow Chemical, Intel, the NFL, and other businesses—against a Georgia law that would have permitted discrimination against gay individuals and others; the governor vetoed it. “We realized this was something new and different,” says Gaines-Ross. “There was a new political party, the party of CEOs.”Those CEOs knew they risked angering half their customers by taking stands on controversial issues. So why do it? Their employees were a major reason. Employees care about these issues and are more powerful than ever in an information- and service-based economy. Just as important, they know it. That’s why employee activism has grown into a significant force in many industries—think of 20,000 Google employees marching to protest the company’s generous severance payment to an executive accused of sexual misconduct, or Wayfair employees massing in Boston’s Copley Square to protest the company’s sale of furniture to a migrant detention center. Those aren’t issues of pay or working conditions; they’re issues in the larger society, and now every company’s most valuable assets, its workers, want to know where their employer stands.

Combine those factors and it becomes clear why at least some CEOs feel they must declare a position on a state election law. “CEOs are being forced to speak up, sometimes only internally,” says Gaines-Ross. “But silence is no longer a good default.”

That’s the no-good-options reality for CEOs in this contentious era. Yes, speaking up will make some customers mad. Also some employees, suppliers, regulators, and investors. But failing to speak up will do the same. You can’t win. About all the solace that can be offered to CEOs is that it’s a complicated world, and they get paid a lot to deal with it.

 

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