Once upon a time, CEOs did not comment on governmental regulations or policies other than those that directly affected their industries or companies. The business of business was business, and commenting upon non-business-related issues was anathema.
Nowadays, hundreds of CEOs have weighed the risks against the rewards of speaking out and decided to speak publicly. They have spoken out on social, political, and environmental issues, such as climate change, LGBT rights, equal pay, immigration, gun control, and race relations. Most of these CEOs have been based in the U.S., but many lead global companies.
In 2015 and 2016, we witnessed dozens of CEOs speaking up against anti-LGBT laws in a handful of states such as Indiana, Georgia, and North Carolina. In 2017, as the Trump administration began, CEO activism has surged. This is not to say that the majority of CEOs have taken a position; these leaders represent a small but vocal group.
At Weber Shandwick, we’ve been steadily analyzing how CEOs, and companies in general (of varying sizes, but mostly mid to large) have responded to each of five controversial Trump administration actions and statements in 2017: the travel ban (January), withdrawal from the Paris Agreement on climate change (June), barring of transgender service members from the U.S. military (July), the president’s comment that “many sides” were to blame for the death of a woman at a Charlottesville, Virginia protest (July), and the decision to end the Deferred Action for Childhood Arrivals (DACA) program (September). In total, we gathered 425 corporate responses.
Company responses have not followed a uniform playbook. Each political event produced its own unique stamp, including legal briefs, open letters, resignations from presidential councils, and the usage of new hashtags on social media.
As a long-time CEO observer and researcher, I believe this activism shows how CEOs are holding themselves accountable in supporting the values of their organizations. Why now? First, employees, customers and other stakeholders are demanding more from business leaders as distrust in government mounts. Second, many companies have invested substantial time and money in establishing uncompromising core values such as diversity and inclusion. (For example, Google spent a hefty $265 million on diversity programs from 2014 to 2016 alone.) When governmental policy undercuts such values, companies feel obligated to speak up. Third, not speaking out on certain issues adversely threatens an organization’s ability to hire talent, especially those coveted Millennials. Based on our recent survey of 1,021 American adults conducted with KRC Research, twice as many Millennials said they would feel increased loyalty (rather than decreased loyalty) toward their own CEO, if he or she took a stand on a hotly debated issue (44% vs. 19%, respectively).
In analyzing how business leaders have responded to these five events, we’ve noticed six patterns that may help CEOs, boards, and senior management make sense of today’s “damned if you do, damned if you don’t” environment and how it relates to their reputations:
- CEOs (usually) do the talking themselves. The majority of company spokespersons who responded to the five events we monitored have been chief executive officers. Three-quarters or more of the statements came directly from CEOs, with the travel ban (84%) and Charlottesville aftermath (77%) yielding the highest rate of outspoken CEOs. For example, when Merck CEO Kenneth Frazier’s resigned from President Trump’s Manufacturing Jobs Initiative following the President’s response to the events in Charlottesville, he issued a statement that said: “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.” According to our research, the majority of responses from CEOs and companies (75%) in the wake of Charlottesville came after Frazier’s stand.
Other corporate leaders do speak up, too. Corporate responses to the potential DACA cancellation included more executives other than the CEO. For example, Microsoft’s president and chief legal officer Brad Smith said that if the government chooses to deport DREAMers who are Microsoft employees, “it’s going to have to go through us to get that person.” Verizon’s general counsel Craig Silliman gave voice to his company’s opposition by writing on the company blog, “800,000 Reasons Why Diversity Matters.” Comcast’s Chief Diversity Officer David Cohen wrote a memo expressing disappointment in the termination of DACA and said “swift action to protect Dreamers is consistent with our values as Americans and in the best interests of our country.”
- The technology sector takes the lead. The technology sector has been the front-runner in terms of speaking out on these five issues. Seventy five percent of the 28 corporate responses to transgender military personnel being barred from serving came from tech companies. Half of the 153 responses to the travel ban (51%) came from tech companies. We found that seven tech companies have spoken up in opposition to all five events since January 2017: Apple, Airbnb, Box, Facebook, Intel, Microsoft, and Salesforce.
But tech isn’t the only sector speaking out. The finance sector has also been active in responding on all five occasions. CEOs from companies such as Goldman Sachs (e.g., immigration ban, Charlottesville), JPMorgan (e.g., Charlottesville, DACA), and Bank of America (e.g., immigration ban, DACA) have all gone on the record on multiple occasions. Various energy sector CEOs (e.g., Patrick Pouyanné of Total and Bob Dudley of BP) have also spoken up in opposition to the administration’s order to have the U.S. withdraw from the Paris Agreement.
- Companies find strength in numbers. The amicus brief signed by nearly 100 companies submitted in the court battle over President Trump’s travel ban set in motion what has become a safety-in-numbers strategy. By banding together in opposition to a government policy, CEOs pooled the risk of individual companies being subject to retaliation while still putting their opposition on record. Since then, there have been more open letters from coalitions or industry associations demanding that policies be reconsidered or statements retracted. For example, over 1,600 businesses and investors signed the We Are Still In declaration to support climate action, and over 500 business leaders lent their names in an open letter to President Trump asking him to preserve DACA.
- Twitter is popular, but hasn’t replaced traditional channels. Twitter has been the preferred mode for companies to speak their minds on perceived divisive issues. Due to the brevity required, Twitter allows companies to communicate quickly and authentically. We found that 47% of the 64 companies responding to the Charlottesville violence were made on Twitter to express concern. For example, Oath/AOL CEO Tim Armstrong tweeted “Hard 2 Believe #charlottesville taking place. We changed our Corp @oath value from “Pay it forward” 2 “Call to action”/we’ll take action.” This summer also saw a noticeable uptick in hashtags appended to CEO and company statements. For example, many CEOs used #LetThemServe in their tweets on the transgender ban, and #charlottesville for the events there. For the DACA termination, CEO communications quickly latched onto eight different hashtags: #DACA, #DefendDACA, #Dreamers, #DACA, #WithDreamers, #Resist, #DreamAct, #HereToStay. (Perhaps not surprisingly, Facebook CEO Mark Zuckerberg preferred to use his own social media platform to stream an interview with three undocumented DREAMers to discuss the proposed cancellation of the DACA program and its impact on them. Nearly three million viewers tuned in.)
Other forms of communication have also been employed by companies. In opposition to the travel ban, 37% of the 62 companies that responded used employee memos about their values (vs. 21% who spoke out on Twitter). Media statements (48%) and company websites (36%) were also popular platforms during the uproar over the U.S. withdrawing from the Paris climate agreement.
- Non-partisanship is possible—and preferred. Many corporate statements we examined did not directly mention President Trump, despite his administration’s involvement in many of the public firestorms. Only 27% of responses mentioned the president when the travel ban was announced, and just 33% mentioned the president in response to the Charlottesville protests. Most CEOs and companies tried not to politicize their responses, but instead broadly communicated, for example, their commitment to diversity in the workplace, the safety and well-being of their employees, respect for all people, condemnation of hate, and gratitude for the service of transgender military people.
- CEOs get personal. Many CEOs have shared personal stories to demonstrate how their positions on these issues have grown out of their own life experiences. For example, CEO Dara Khosrowshahi (formerly of Expedia, now of Uber), wrote in his internal memo in January about the travel ban: “My family emigrated to the US after the Iranian revolution in 1978. We sure didn’t feel like refugees, but in hindsight I guess we were…I remember my father…doing everything he could to get us that treasured Green Card — and the happiness, the sense of relief, when he finally did – we knew that we were welcome now, and we would be welcome tomorrow.” Following the announcement of the DACA repeal, Microsoft CEO Satya Nadella wrote a LinkedIn post saying his concern comes back to his own personal story: “As I shared at the White House in June, I am a product of two uniquely American attributes: the ingenuity of American technology reaching me where I was growing up, fueling my dreams, and the enlightened immigration policy that allowed me to pursue my dreams.”
In this era of social media and instant global communications, business leaders find it increasingly difficult to hide in the shadows. CEOs are more visible now and their silence on various public issues can at times be deafening. By virtue of business being more transparent today because of social media, employees talking online, and citizen journalists, many business leaders feel more pressure to take a moral stand on behalf of their companies, if not for themselves. For better or worse, stakeholders now hear their CEOs’ heartbeats.
Leslie Gaines-Ross is Chief Reputation Strategist at Weber Shandwick, a leading global public relations agency with offices in 81 countries. She is the author of Corporate Reputation: 12 Steps to Safeguarding and Recovering Reputation.