On May 20, 2021, the FiscalNote Executive Institute hosted a virtual roundtable discussion, “Assessing Companies’ Roles in Corporate Activism” with Collis Jones, Vice President, U.S. Public Affairs Policy & Strategy at John Deere; Bruce Mehlman, Founding Partner, Mehlman Castagnetti Rosen & Thomas; and Alison Omens, Chief Strategy Officer at JUST Capital. The senior level, off-the-record discussion was facilitated by Dave Curran, Chairman of the FiscalNote Executive Institute.
The following are key takeaways from the discussion:
As public trust in government declines, business leaders are being asked to step up and take more active roles in addressing social issues.
- A May 20th report from Edelman confirms that business is currently the most trusted institution, outperforming government across all societal challenges. Specifically, the poll found that trust in government has dropped to 58 percent from 65 percent in May 2020.
- As the trust gap widens, corporations and C-suite executives are being asked to take the lead on societal challenges such as racism, climate change, and vaccine hesitancy.
- Employees, especially younger generational workers, are also expecting their companies and CEOs to take public positions on major societal issues.
Most companies and business leaders are unprepared to handle these new social demands.
- In response to public pressure, many CEOs are commenting on hot-button social and political issues—a trend that is redefining leadership responsibilities and business roles, as well opening up new business risks.
- Not all C-level suite executives are on board with taking a more active stance on societal issues. A recent poll from Fortune, for example, revealed that CEOs are split down the middle about whether or not they should speak out on controversial social and political issues—50% of CEOs felt it was a good idea, while the other 50% were against it.
- The challenge is that most companies haven’t assembled teams to handle social activism, and most C-suite executives don’t have the training to take on this type of social responsibility.
- In the end, those that act too fast or too often will not win the long-term game. Trying to make the social media news cycle or appear “current” can’t be the goal.
Companies need to be thoughtful, form diverse response teams, and intentionally choose to speak up on issues that align with core company values.
- Words can move markets. Business leaders should think slowly and resist the pressure to respond quickly. Companies need to remove any emotion and ask how the issue at hand affects their employees, their customers, their business, and their shareholders. This includes taking into account both the short-term impact and the long-term, retrospective impact.
- Ideally, companies should develop internal teams made up of various departments (i.e., senior CEO staff, communications, general counsel, etc.) and collaborate with allies in the industry before making any major moves. One critical element is making sure everyone is “signing from the same hymnal” before responding publically.
- Businesses can’t operate like NGOs and business leaders aren’t politicians. The goal is not to swing at every pitch, but instead, to speak out on societal issues that align with existing company values.
- Not every social stance has to be public. CEOs and senior leadership can communicate empathy or address important social issues with employees internally and privately, without the need for big, public statements.
What companies do will matter more than what they say.
- Data shows that the public has adopted a more holistic view of business behavior and is interested in how a company is approaching its consumers, how it operates in the communities in which it exists, its environmental impact, and how it interacts with its shareholders.
- Authenticity and transparency are increasingly valued by society and should be embraced by today’s business leaders. There are no longer any secrets in business, and what companies say and do internally or behind the screen will eventually see the light of day. The core operational choices a company is making and how it talks about itself publically need to be consistent.
- Companies that simply develop strategic teams to win the culture war will lose. The successful enterprises will be those that thoughtfully evaluate what they care about and then take action to make a difference in those areas, even when the cameras are off.
- When it comes to corporate activism, communicating volunteerism and other anecdotal community efforts are important. However, core operational data points that measure and reveal how a company is addressing issues such as D&I, ESG, and living wage are also critical. A combination of both qualitative and quantitative data will be key moving forward.