On March 29, 2022, the FiscalNote Executive Institute hosted a virtual roundtable, “Employee Activism: What Business Leaders and Brands Should Know.” The roundtable was chaired by Laurie Ollivent, Senior Practice Development Lawyer, Employment & Incentives at Linklaters, and featured the following panelists:
- Bruce Mehlman, Founding Partner, Mehlman Castagnetti Rosen & Thomas
- Bennett Freeman, Associate Fellow Chatham House and former SVP, Calvert Investments
- Lorenzo Lopez, Vice President, Corporate Communications, Diageo
Below are some key insights from their discussion and the follow-up audience Q&A.
Employee activism is wide-ranging
- Different triggers. “Micro” triggers involve employees’ desire to improve pay, benefits, and working conditions. “Macro” triggers involve employees’ desire for their company to take a public position on social, political, and environmental issues.
- Different leaders. Employee activism can be initiated by individuals, as well as larger groups of workers. It can also extend to a broader range of people, such as company directors, union representatives, and self-employed contractors.
- Different manifestations. Employee activism manifests itself not only in strikes, slowdowns, walk-outs, and mass resignations; it also occurs in more subtle ways, such as the airing of grievances in workplace groups, during exit interviews, and in interactions with unions.
- Prominent today, but not new. Movements like #MeToo and Black Lives Matter, as well as the fight against climate change and intensifying “culture wars” in certain countries, have helped shine a brighter light on employee activism. Yet employers have been grappling with activism within the workplace in some shape or form for as long as companies have existed.
- Against the status quo. Despite different triggers and manifestations, all employee activism shares a common desire for change.
The era of neutrality is over
- Inaction is a liability. These days, companies that are perceived to be silent or apolitical open themselves to criticism for their inaction as much as companies that take a vocal stand. A 2020 poll by JUST Capital, a nonprofit, found that 68 percent of Americans expected CEOs to articulate a position on major political issues — and 44 percent wanted CEOs to do this even if the issue was only tangential to their companies’ core business.
- Determine how, not whether, to engage. Management must decide when, where, and how to respond to employee activism. Their choices will affect everything from the public image of their brands, to recruitment and retention efforts, to workers’ productivity, to their firms’ share prices.
- Anticipate more zero-sum outcomes. In the past, mild employee activism could often be encouraged and harnessed in ways that aligned with a company’s objectives and culture. Increasing political polarization in many Western countries, however, means that such “win-wins” may become rarer.
Responding effectively to employee activism
- Reflect frequently on existential questions. Among the most important are: What kind of company are we now? And what do we wish to be known for in the future?
- Engage thoughtfully, not impulsively. Though disengagement is no longer viable, jumping into every debate is equally unwise. Develop some policy expertise in a subject before taking action in that area. And remember that, while social media frequently feeds on the rage of a small minority, it can also be unrepresentative of the views of society at large.
- Acknowledge the diverse views of workers and other stakeholders. Every large company today has employees hailing from different backgrounds and with opposing views on controversial issues; the diversity of opinions of companies’ stakeholders is similarly vast. Pleasing everyone, therefore, won’t be possible. But respectfully acknowledging differences — “decent people can still disagree” — can help mitigate criticism when it does come. Likewise, senior management needs to include a broad diversity of perspectives when making important decisions.
- Develop robust communication channels. To deeply understand workforce differences, as well as build trust and better understand employees’ priorities, companies should proactively engage in structured, ongoing dialogue with workers. Relying on ad hoc or last-minute consultations after a crisis strikes usually leads to bad outcomes.
- Study what others are doing. Companies can still adhere to their values without always being at the vanguard of every new movement. Taking time to assess the positions and actions of competitors before acting can help firms avoid missteps, too.
- Be authentic and consistent. Few things can be more damaging to a company’s reputation than being accused of self-serving hypocrisy (as distinguished firms McKinsey and Edelman have discovered in recent years). Public support for activism must be matched by meaningful action.
- Admit mistakes readily. Engagement will ultimately produce blunders as well as successes. In 2015, for instance, Starbucks quickly ended its impractical directive to baristas to talk about race with busy customers. That swift reversal likely helped guide the company to a more effective intervention in 2018: closing all of its stores for an afternoon to conduct racial-bias training, after an employee at a Philadelphia branch called the police on two black men who had simply been waiting for a friend.
Two further trends to consider
- Rise of the empowered worker. After decades of declining returns to labor and increasing returns to capital, the tide appears to be turning, as businesses compete feverishly for talent. Younger employees, in particular, seem emboldened to seek more from their employers — from flexible-working arrangements to demands that their jobs offer a social purpose beyond making money.
- Rise of ESG. For a growing number of investors, politicians, and regulators, environmental, social, and governance issues have become a major area of interest. Companies that neglect ESG do so at their peril — especially executives whose compensation will, in the future, be increasingly tied to their firms’ performance on such metrics.