U.S. companies are speaking out on divisive hot button issues
By Tom Idle
“In this present crisis, government is not the solution to our problem; government is the problem.” This sentence in Ronald Reagan’s inaugural address of 1981, which poured ire on the notion of ‘big government,’ has stayed with many Americans to this day. In fact, almost 70 percent of people see government intervention (or otherwise) as the greatest threat to the nation, according to the latest Gallup poll on the subject, compared with just 26 percent who think it’s big business.
It is little wonder then that politicians—from both the left and right sides of the political spectrum—have long banged the anti-corporate drum in the apparent hope of shifting attention away from themselves. Questioning the role, size and influence of business in society has become the political playground game of choice. The latest U.S. election was dominated by discourse on the subject, with both Bernie Sanders and Donald Trump regularly speaking against corporate outsourcing, for example, with some effect. Since entering the White House, and toning down his anti-business stance, Trump’s approval ratings have dropped, while Sanders is now the country’s most popular active politician.
As such, concern about corporations will no doubt continue, and it may unite parties rather than separate them. “If there is potential for a political alliance that can break through Washington’s long deadlock, it might just be a coalition aligned against large, publicly traded corporations,” says Justin Fox, former editorial director of the Harvard Business Review.. He points to the reaction of all corners of the House to Trump’s bill signing that allows telecoms companies to share the web-browsing histories of their customers without consent. Eighty-four percent of Republicans, 82 percent of Democrats and 82 percent of independents categorically recorded their disagreement that the companies should be allowed to carry out such an activity.
The Birth of ‘CPR’
However, the intersection of business and politics—which for so long has rarely been encroached upon unless companies felt compelled to rally against policies on specific issues that might directly affect their profits—is shifting. Encouraged and buoyed by their increased power of influence via social media, the general public—including customers, employees, suppliers and community members—has joined the chorus of corporate mistrust and resentment once reserved exclusively for politicians, NGOs and activist groups. Of course, this increased pressure has spurred many a corporate social responsibility program; brand reputation has become much more valuable in the face of multiplied dissent.
But it has also driven the emergence of ‘corporate political responsibility’ (CPR), according to Dr. Johannes Bohnen, co-chairman of the Berlin-based NGO Atlantische Initiative. “The use of soft, begging-for-compromise terms like ‘social’ is treacherous. It shows what companies often shy away from: they don’t want to appear political in any way whatsoever,” he says. “As employers and innovators, [companies] affect the structures of the communities where they operate.”
While many business leaders struggle to define themselves in a political context, shying away from party politics is a missed opportunity, Bohnen says. “Saying what you want means preventing distrust. Openly declaring that you’re acting politically is the stronger position. ‘Social responsibility’ falls short as a description of the extensive relationship between company and community. A new, bold concept of CPR could help.”
It would appear that a growing number of executives have had the same idea, particularly among the more progressive and forward-thinking community of businesses.
Rallying Against Executive Orders
Some of this newfound political confidence has been triggered by the actions of the Trump administration. Reversing many Obama-era, or otherwise Democratic, policies has been a top priority, like the abolition of the Trans-Pacific Partnership and the removal of roadblocks to the Canadian Keystone oil pipeline. “Progressive business achievements are certainly being targeted given the ideologies in the White House,” says Corey Norton, an export and import attorney at Trade Pacific Law.
One of the most prominent and stark displays of companies giving short shrift to political intervention came most recently as President Trump issued an executive order to ban refugees and certain legal immigrants from coming to the U.S. The public affairs units at Nike, Coca-Cola, Ford, Google and host of other firms quickly issued statements to publicly oppose it. Procter & Gamble CEO David Taylor sent an immediate memo around to staff stating that the new policy “establishes blanket exclusion, which is fundamentally inconsistent with our core values.”
Starbucks went even further, promising to hire 10,000 refugees. In an email to all staff, former CEO Howard Schultz offered a “resolute promise” while bearing a “deep concern” and a “heavy heart.” “If there is any lesson to be learned over the last year, it’s that your voice and your vote matter more than ever,” he wrote.
Elsewhere, the efforts of a group of U.S. legislators to weaken the Dodd-Frank Act 2010—a move that would effectively allow oil, gas and mining companies to sidestep transparency and reporting requirements—has been met with corporate resistance too.
Thirteen companies likely to be affected—including Anglo American, BHP Billiton and Glencore—issued a collective statement in support of maintaining the original rules. “We’re aware of on-going developments around the Congressional Review Act.“Consistency of financial disclosure makes good business sense: It provides regulatory certainty, reduces compliance costs and facilitates ease of comparison of disclosed financial information across jurisdictions, which is in turn critical for civil society and other users of financial disclosure data. We will continue to disclose our payments of taxes and royalties,” BHP said in a statement.
Jeff Immelt, CEO of GE, has used a range of platforms, including the media and national events, to speak out publicly against the president’s apparent easing of environmental rules designed to slow global warming.
Legislator efforts to allow companies to deny service to lesbian, gay, bisexual, and transgender (LGBT) customers should they so wish—on religious grounds, or otherwise—have also garnered unprecedented pushback, with PayPal, Disney, Apple and Facebook among those actively speaking up.
Salesforce decided to put its money where its mouth is, and threatened to disinvest its planned $40m expansion into Indiana if the 2015 Religious Freedom Restoration Act (RFRA) hadn’t been softened to protect the LGBT community. This action worked, and Salesforce Marketing Cloud CEO Scott McCorkle said the investment was possible because of the “RFRA fix.” “We’re committed to protecting our employees and customers from discrimination, because equality is a core value,” he says.
It is a position likely to be adopted by many more businesses. Research by Credit Suisse reveals that a group of 270 companies that support LGBT employees outperformed a global index by 3 percent per year during the last six years.
Continued Growth and Opportunity
The number of businesses finding their political edge and new ways to engage with stakeholders on issues of social and environmental importance continues to grow. Some examples of current-day decisions include the NCAA threatening to blacklist basketball-mad North Carolina over its stance on the “bathroom law” (which requires transgender people to use the public bathroom that corresponds with the gender on their birth certificate),and Koch Industries agreeing to remove questions about previous criminal convictions from its job application process.
“Citizens holding their elected officials accountable remains paramount. But many companies already lead in areas of human rights and sustainability without governmental pressure,” says Norton. “Responsible companies should enjoy recognition in the marketplace as well as advocate that their standards be demanded by consumers, industry and regulators alike.”
A recent Unilever-backed survey into consumer buying habits revealed that a third of consumers now choose to purchase from brands based on their social and environmental impact—opening up a $1 trillion market for companies with a conscience.
Taking a political position on often-contentious and divisive issues does come with a risk. But the opportunity to position the brand as being a responsible, proactive and progressive part of the solution to the world’s most complex and challenging social challenges could be too good to miss.