The office of the CEO has long been a cherished bully pulpit, a haven for business leaders to influence public policy and push causes important to their companies, employees or themselves.
In 2016, top U.S. business leaders banded together to oppose North Carolina’s controversial “bathroom bill,” including halting local projects or events in the area. The protest, a significant milestone that helped usher in the rise of CEO activism, was projected to ultimately cost the state an estimated $3.8 billion by roughly 2030. More recently, many CEOs quickly mobilized to condemn Vladimir Putin’s unjustified attack on Ukraine and to halt business with Russia, a move that could have a profound impact on the region.
But as CEO advocacy becomes the norm, the increased cadence with which bosses deploy the megaphone could ultimately undermine the influential perch and lead executives to become just another voice in a sea of outrage.
- “CEOs have lost control of this,” Donald Hambrick, a Pennsylvania State University professor who has studied the issue, told me. “There’s no turning back because the employees lean on them, expect it and, essentially, demand it. And the importance of their voice becomes watered down. It doesn’t have the same effect.”
It’s clear that the U.S. political system is broken. Elected officials have almost fully entrenched themselves in their respective political camps, emerging solely to throw grenades at the opposing troops and, every so often, vote on legislation that actually improves the lives of those they represent. You know, do their jobs.
- Some executives recognized that looming leadership vacancy early on and stepped in. Marc Benioff and others helped create the “activist CEO” label with their rather dynamic (at least, for the time) stances on LGBTQ+ rights, for example.
The world has changed dramatically since Benioff took that fateful stand in 2015 against then-Indiana Governor Mike Pence. There’s constantly a new reason to be mortified: a deadly pandemic, mass shootings, insurrection, the destruction of civil rights, monstrous hate crimes; the list goes on and on.
CEOs still remain a relatively trusted voice as belief in most major institutions, including government and the press, reaches near-crisis levels. The challenge now becomes balancing how to sustain that respected reputation amid a never-ending stream of chaos.
- For years, a harsh statement from a CEO like Benioff or JPMorgan Chase’s Jamie Dimon would send shockwaves. That novelty has, by and large, worn off, particularly given that behind the scenes, many businesses simply ignore that rhetoric and continue to engage in contradictory behavior.
- Now, business leaders need to get creative about how they push back. When the conservative majority of the Supreme Court decided to eliminate a decades-old constitutional right to abortion, companies like Patagonia offered to cover the cost if workers were arrested during protests about the decision.
- “The statement is insufficient,” said activist and Rutgers Business School professor Jeana Wirtenberg. “If it’s disingenuous and they don’t put any action behind it, it can cause more harm than good.”
However, CEOs remain hesitant to stick their necks out too far, particularly if it means undermining the company’s financial performance. And, frankly, there are many stakeholders who would probably prefer that.
- The main mandate for a CEO is to make money. That’s clear in the divide some make between advocating on issues and continuing to keep customers who undermine those efforts — or even blatantly defy them — like Salesforce and the NRA.
- But activism is no longer for the renegades. Instead, it’s becoming a regular part of corporate branding strategies, which means, like most other cherished things in this world, companies are finding ways to make money off of taking a stand.
- PR firms are even suggesting to CEO clients that they engage on issues “that are relevant to their points of differentiation in the marketplace,” per Hambrick.
Such is the reality in business. But it is one money grab that could be mutually beneficial for many stakeholders besides investors.
- Increasingly, employees want their workplace to serve as a substitute for a country that is held hostage by ideological demagogues.
- Of course, companies aren’t homogenous. But it’s evident that Big Tech is chock-full of liberal workers. That means executives, many of whom historically took painstaking efforts to straddle the middle line, will need to wade deeper into the left of the political spectrum.
To date, CEOs have largely resisted the more sweeping actions workers have called for that go beyond strongly worded statements.
- Instead, perhaps in an effort to avoid undermining that cherished bully pulpit or wreaking havoc on the bottom line, businesses seem more interested than ever in muzzling employees who are raising valid concerns.
- At even the most progressive tech companies like Salesforce and Netflix, workers say they now feel sidelined by corporate overlords and fear the death of the once-revered cultures of radical openness.
The exacerbation of the political divide in the U.S. is likely to force the same future for businesses as the country itself: a corporate America increasingly divided by “blue” or “red” labels. Sadly, business leaders are one of the few remaining glimmers of hope in a gradually trust-less society. That means it’s now time for CEOs to decide which side to take.