On January 25, the FiscalNote Executive Institute and the Center for the Study of the Presidency and Congress hosted an in-person roundtable, “States Strike Back: When Your Company’s Public Position Clashes with Elected Officials’ Policies.” Featured speakers included:

• Bob Grohowski, Vice President, Legislative and Regulatory Affairs at T. Rowe-Price
• Orson Porter, Senior Managing Director at Teneo
• Glenn Nye, CEO at the Center for the Study of the Presidency and Congress
• Hanna Abou-El-Seoud, Director, Corporate and Government Affairs at Nestlé

Below are some key takeaways from the discussion:

Companies must navigate unfamiliar waters

• In with the new. Until recently, most consumers didn’t want to hear companies discuss issues that are not directly tied to their core business. Generational transition is changing attitudes, however. Millennials and Gen Z now make up one-third of the U.S. population and globally, they make up about one-half. Younger generations are more likely to expect firms to take a public position on contentious issues.

• 360-degree pressure. Until recently, whatever activist pressure companies faced typically came from the political left. Now the political right has turned up the heat, too.

• Nowhere to hide. The rapid polarization of American politics has shrunk the political middle — corporate America’s traditional ally.

• Social media can make things harder. The widespread use of social media has increased pressure on companies to respond quickly to major news headlines. Yet quick responses have also increased the likelihood of missteps.

• Your employees may disagree with you as well. Companies’ workforces are not homogenous. Employees in socially conservative Utah will often hold different priorities than their colleagues in socially liberal California. Multinational companies with employees in, say, Saudi Arabia and Stockholm will face even wider chasms in values and attitudes across their workforces.

Companies must find and use their inner compass

• Three important letters. ESG means different things to different people. Organizations should first build internal consensus on what they mean by “environmental,” “social,” and “governance.” Without that consensus, they can’t communicate a coherent message externally.

• Talk is valuable. To create that consensus, bring in all departments — from legal to operations. And consider creating a cross-departmental ESG committee that regularly meets to monitor external ESG developments and that also serves as a communication fulcrum for ESG throughout the company.

• Break down silos. Sustainability departments and PR departments frequently don’t always collaborate closely with government affairs departments. That’s why it’s not uncommon for a company to adorn its Twitter logo in rainbow colors in June (Pride Month) when, in the same month, it makes a contribution to a Political Action Committee that supports candidates opposed to gay marriage.

• Preach beyond the choir. Build relationships with internal departments such as finance, and with colleagues who may be more skeptical of ESG efforts.

• Anticipate the next headline. Firms need to prepare well in advance, to ensure their internal and external positions are closely aligned.

• Think before you act — and speak. Before taking action, reflect on whether it would be consistent with existing commitments. Hypersensitivity around language these days also means that companies must choose their words extra carefully: seemingly innocuous phrases, such as “misinformation,” can ignite a firestorm.

You’re still a business

• “Republicans buy sneakers, too.” Don’t forget Michael Jordan’s famous observation. Political partisans may be louder and more numerous these days, but most Americans are not obsessed with politics — witness the long-running decline in turnout for elections. You don’t want to be viewed as either a Democratic company or a Republic company. The upshot is that there are many advantages to steering a middle path, even as you strive to adhere to your core values.

• Don’t wade in deeper than you can swim. Few CEOs want to be hauled before Congress and lambasted for being “woke.” When facing contentious issues, it’s especially vital to come to your internal stakeholders with solutions, not problems.

• Full circle. It’s also important to ultimately bring your communication and positions back to your business and core competencies. In other words, make the business case for your non-business positions.

• Reputation matters. Protecting and strengthening your company’s reputation should always be a priority.

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