Home CATEGORIES Business Ethics & Philanthropy Is It Socially Responsible for Corporate Leaders to Take Political Stances?

Is It Socially Responsible for Corporate Leaders to Take Political Stances?

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By: Nicole Schlabach
It is increasingly common for corporate leaders to take stances about political issues and corporate social responsibility is en vogue.
Often, leaders take stances in support of the causes of social equality or justice.
Are these stances, though, socially responsible?

Company Leaders Take a Stand for Many Reasons

In today’s digital landscape, it’s become increasingly difficult for corporate leaders to remain objective about highly publicized issues.
Leaders are put in a tough situation, especially if the social issue intersects with their company’s operations.
Executives may genuinely care about a social issue. They may also see the public relations benefits of vocalizing their concerns.
When executives align their brand voice with a social cause, the true motivation behind the action is often murky.
Their list of considerations likely includes three factors:
  1. True passion or support
  2. Social pressure
  3. Commercial interest
This mix of motivations is usually apparent in the end result.
For example, Nike’s decision to align itself with Colin Kaepernick, NFL player and activist, ended up making business sense.
Within 24 hours after an advertisement featuring Kaepernick ran, Nike earned more than $43 million in media exposure, according to a Fortune article.
“We find that the more disruptive we are, the more we grow,” said Nike CEO Mark Parker during an interview for Fortune about the surge in engagement.
It appears that Nike’s motivation could have included a passion for racial justice along with commercial interest.
Some consumers may withhold their support unless they believe an executive’s actions are genuine.
An executive’s support for a cause will be more powerful if it already aligns with their existing beliefs.

Younger Generations Expect Companies To Have An Opinion

Before kickstarting a campaign, corporate leaders know it’s smart to consider the perspectives of Gen Z and millennials.
Millennials make up the largest generation in the country’s workforce and by 2020, Gen Z is set to make up 40% of all consumers.
Public relations firm – WeberShandwick – found that 47% of millennials think CEOs have a responsibility to take a stand on social issues.
The same Weber Shandwick study found that over half of millennials are more likely to purchase goods if the company’s CEO speaks out on issues that resonate with them.
Corporate leaders with a young audience may conclude that the risk of remaining neutral or silent is greater than the risk of speaking up.
A study by the American Press Institute shows that younger generations use social media to learn about political issues and engage by voicing their opinion.
Examples of activism facilitated by social media include the #BlackLivesMatter and #MeToo movement.
Companies with a younger audience may consider tracking “mentions” on social media to gauge how their message is being received.
To meet their consumers’ expectations, companies face increasing pressure to take a stand.

Employees Have A Say, Too

Internal stakeholders will inevitably have differing views about controversial opinions.
A corporate leader may weaken its internal culture by advocating for a controversial cause that some employees do not wish to be identified with.
According to a 2019 Glassdoor study, 79% of adults consider a company’s mission and purpose before applying. Culture drives 65% of employees’ decisions to remain in their jobs.
Employees will speak up — especially if they want their CEO to take a stand on a publicized issue.
For example, Wayfair employees began walking out of their company’s headquarters in protest of what they viewed as an unethical business partnership.
They also sent an open letter to executives regarding the sale of bedroom furniture that ultimately ended up in migrant detention centres.
There is no doubt that Wayfair executives thought carefully about how to respond.
Corporate leaders explained their decision to uphold the partnership in an open letter to employees. They also donated $100,000 to Red Cross.
“As a retailer, it is standard practice to fulfil orders for all customers and we believe it is our business to sell to any customer who is acting within the laws of the countries within which we operate.”Wayfair leadership’s letter to its employees
Wayfair employees make it clear that they want their company to align with their values.
In this environment, executives should foster a transparent dialogue with their workers.
These conversations will be even more effective if they happen before a public decision is made.
Allowing employees to voice their views can only bode well for the resulting action and how it is received externally.

Successful Corporate Activism Balances Passion and Business

A mix of company-building motivations and well-intentioned passion will facilitate change without putting a company at risk.
A leader could stir the pot about a controversial issue without contributing to the welfare of society.
On the other hand, a truly passionate executive could voice an opinion but disrupt the company’s ability to earn a profit.
A decision that considers both the wellbeing of society and the company will support both the issue and employees’ needs.
These decisions are not only socially, but also fiscally responsible.
Nicole Schlabach authors reviews and article content for Clutch, the leading provider of research and reviews for B2B services.

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Regards,
The CSR Journal Team

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