When should CEOs speak out on politics?

As executives flee White House business councils this week, they reflect an increased boldness in U.S. businesses to address political topics.


In the fallout of President Trump’s remarks on the violence in Charlottesville this week, it’s clear that corporations are increasingly willing to take political stances.

Trump hastily dissolved two business advisory councils this week as chief executives began resigning over his remarks about an eruption of violence in Charlottesville, Virginia, sparked by a far-right rally around a Confederate monument. Among them, Intel, Merck, Under Armour, 3M, and the Campbell Soup Company.

The clash turned to horror when a white supremacist allegedly plowed his Dodge Challenger into a crowd of anti-Nazi protesters, killing a woman and injuring 19 people.

Making political statements can be perilous for companies, but sometimes it’s riskier not to take a stand, two experts in executive communications suggest.

Companies have a fiduciary responsibility to their shareholders, and that consideration plays into CEO’s political positions, says Rob Friedman, a communications consultant and former senior director of Global Executive Communications for Eli Lilly and Company. There’s a risk any time a corporation wades into politics, because it can be a lose-lose situation, Friedman adds.

That said, these days the fiduciary responsibility includes a commitment to diversity in an increasingly diverse country, Friedman says. That makes it more obvious that companies would take a stance in this case.

“I’m not saying it isn’t courageous,” Friedman says. “I’m glad these CEOs did it. But what may seem like taking a stand in courage: they’d be in trouble if they didn’t.”

Brands that take a stand will benefit because consumers want brands to take a stand, studies show.

Senior executives have an obligation to lead on ethical matters, says Justina Chen, story strategist with Upstart Agency.

“CEOs are more than the head honchos of their companies; they are also the chief inspiration officers,” Chen says. “That means they have to consistently stand for their principles and be the ambassador for their company’s values.”

Pressure on CEOs to disavow Trump

The issue came to the forefront “as public pressure mounted on executives to disavow Trump after he doubled down Tuesday on his initial response that counter-protesters demonstrating against white nationalism were equally to blame for the violence at race-fueled riots in Charlottesville over the weekend,” NBC News reported.

The first to quit was Ken Frazier, one of the few African-American CEOs of a Fortune 500 company. Frazier, who heads the pharmaceutical giant Merck, said in a statement, “America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry, and group supremacy, which run counter to the American ideal that all people are created equal.”

Never one to turn the other cheek, Trump punched back.

The pharmaceutical industry tends to be conservative, seeking fewer regulations and lower taxes to spur innovation, Friedman says. Yet the industry learned a lesson after aligning itself unambiguously with the Bush administration, he says. It then faced a political sea change in 2008, with Democrats holding both houses and working on health care legislation.

Furthermore, the customer base of all U.S. businesses is increasingly diverse. Companies taking a political stance have business as well as ethical reasons to do so, Friedman says.

“Just like businesses have their strategy, and they’re aligned with the bottom line,” Friedman says. “They’ve also got to make sure their interests are aligned with our culture, and our culture has changed. … If you’re going to [take a stand] you’d better put your finger on the pulse of the public.”

Medical center Cleveland Clinic announced Thursday that it would not hold its annual fundraising gala at President Trump’s Mar-a-Lago resort in Florida as planned.

“After careful consideration, Cleveland Clinic has decided that it will not hold a Florida fundraiser at Mar-a-Lago in 2018,” the hospital system said in a statement. “We thank the staff of Mar-a-Lago for their service over the years.”

The clinic’s CEO, Toby Cosgrove, was one of the executives who walked away from a White House business advisory council.

Joint Chiefs speak out

Friedman notes that even members of the Joint Chiefs of Staff, who head the racially diverse branches of the military, made the rare move of issuing statements on political matters following the riot in Charlottesville.

Lawrence Summers, former Treasury secretary in the Clinton administration and economic adviser to President Obama, asserted in The Washington Post Thursday, “Trump’s CEOs resigned. His Cabinet should do the same.”

In his remarks, Trump repeatedly condemned bigotry, “the neo-Nazis and the white nationalists, because they should be condemned totally.” However, he also criticized those on the left who clashed with neo-Nazis and said some protesters showed up just to defend a statue of Confederate commander Robert E. Lee that was at the center of the controversy.

“So this week, it’s Robert E. Lee, I noticed that Stonewall Jackson’s coming down,” Trump stated. “I wonder, is it George Washington next week? And is it Thomas Jefferson the week after. You know, you really do have to ask yourself, where does it stop?”

Spotlight on violence

The clash in Charlottesville came just as the September issue of The Atlantic detailed “The Rise of the Violent Left.” However, the author, Peter Beinart, subsequently wrote that where Trump is “wrong is in suggesting that it’s a problem in any way comparable to white supremacism.”

Daniel Henninger of The Wall Street Journal called the clash in Charlottesville “a pitched battle between two organized mobs—the white nationalist groups on the right and the badly underreported Antifa, or ‘antifascist,’ groups on the hard-as-stone left.”

The American Civil Liberties Union of Virginia, which had defended the far right’s Constitutional right to protest, blamed the violence on ineffective policing. In a statement, it alleged that “law enforcement was standing passively by, seeming to be waiting for violence to take place, so that they would have grounds to declare an emergency, declare an ‘unlawful assembly’ and clear the area.”

Nevertheless, corporate chiefs clearly were not in the mood for ambiguity or equivocation when a member of the far right had allegedly committed political terror by running down protesters.

Said Chen: “When leaders act and speak boldly from this place of truth, they build trust with all their constituencies—from employees to customers.”

@byworking

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