follow us on twitter @elitebizmag find us on facebook connect with us on linkedin google+ page

The C change: CEO activism allows execs to influence social issues

Written by Eric Johansson on Monday, 10 October 2016. Posted in Politics, Analysis

With the dawn of CEO activism, speaking out on political issues is no longer considered career suicide. However, the risks can still be as great as the rewards

The C change: CEO activism allows execs to influence social issues

Say the word activist and most people wouldn’t think of Marc Benioff, the CEO and founder of Salesforce, the cloud-computing company. But while he favours bespoke Berluti suits over Che Guevara t-shirts, he’s become the face of a movement of business leaders speaking out on red-hot political issues. Or as he put it: “There’s a third political party emerging in [the US] called CEOs.”

While business leaders have historically avoided dabbling in politics – save for throwing the occasional fundraiser – the rise of CEO activism means the times they are a-changing. “We are seeing a pivotal shift in society,” says Chris Gorell Barnes, CEO of Adjust Your Set, the content agency, and founder of the Blue Marine Foundation, the non-profit organisation devoted to preserving the oceans.

And Benioff is leading that revolution. In the past two years, he’s openly opposed legislation aimed at annihilating protections against discrimination targeting members of the LGBT community in Georgia, Indiana and North Carolina. But rather than shouting from the barricades, the tech entrepreneur uses two far more effective weapons: Twitter and his personal network. By publicly denouncing the bills and proclaiming that he’d stop investing in those states, he not only raised awareness but also convinced other business leaders to do the same. Amongst the corporate chieftains who joined him in criticising the federal laws and withdrawing investment were the CEOs of Apple, Disney, IBM, Intel and Bank of America. 

But that’s not the only topic the head honchos of companies have voiced an opinion on in the last two years. Howard Schultz, CEO of Starbucks, launched a campaign for gun control and over 146 tech entrepreneurs have signed an open letter against Republican presidential hopeful Donald Trump, referring to him as a potential “disaster for innovation”. And in January, Max Temkin, co-founder of the company behind the board game Cards Against Humanity, famously sent 50 gallons of lube to the Ammon Bundy’s Oregon militia, an American right-wing organisation that occupied the Malheur National Wildlife Refuge, after the public had mailed it hundreds of dildos as a protest. And this political awakening amongst business leaders isn’t confined to within the US. 

In Europe, Spotify’s co-founders spoke out about the cost of living in Stockholm this spring and several UK CEOs argued both for and against Brexit in the months leading up to the referendum on the UK’s place within the EU. So while the business leaders of the past would have kept their mouths shut, it seems the CEOs of today are ready to sing the song of angry men. “There is definitely a sea change going on,” says Leslie Gaines-Ross, chief reputation officer at Weber Shandwick, the global relations firm.

In June, Gaines-Ross was one of the authors behind a report released by the agency on the dawn of CEO activism and what has brought about its rise. “It’s because CEOs have started to feel it’s their moral obligation to speak out on issues that impact their employees, communities and society as whole,” says Gaines-Ross. But this ethical stance is only part of the story. Another is closely related to Benioff’s weapon of choice: Twitter. 

Given that social media and the internet have become such an integral part of society in recent times, it shouldn’t surprise anyone that the connectivity of the web is enabling people to easily find out what businesses’ head honchos think on most topics. “You can’t hide anymore,” says Gorell Barnes. “With that transparency, you have to give people what they want: they’re expecting companies to do better things.”

Jonas Almgren, CEO and founder of Artfinder, an art retail platform, believes that this level of transparency counteracts business leaders secretly trying to influence policy makers behind the scenes. More than ever consumers are aware of the values CEOs possess and expect this to be a public conversation, rather than a clandestine affair. “Customers want to see who they are betting on,” he says.

It seems this is borne out by the evidence. In fact, four out of ten customers expect business leaders to speak out on hot-button topics, according to the Weber Shandwick report. “That’s an incredible number and it will only continue to grow,” says Gaines-Ross. Certainly the report supports the conclusion that this expectation will only become more prevalent as the population ages, with 35% of millennials being open to CEOs taking a public stand compared to 29% of Generation Xers and 27% of baby boomers.

As a result, a CEO sticking to their principles can have untold benefits for a brand. Weber Shandwick’s survey showed that 40% of people are more likely to buy from a company when they agree with its executives. For instance, the intent to buy Apple products increased after Tim Cook, the company’s CEO, publicly supported gay rights and joined Benioff in his condemnation of the bill in Indiana, according to a study by researchers from Harvard Business School and Duke University. In other words, CEOs speaking out can help businesses grow their brand and increase their profits. “People want to purchase products from companies that support their ethical stance,” says Gaines-Ross.

For some brands this may not necessarily be a revelation. Starbucks, Unilever and Ben & Jerry’s all have a long and profitable history of building their brands by attempting to fight climate change and supporting local communities. But with the increase in CEO activism, business leaders may be encouraged to take an even more open position than before. “CEOs are seeing a direct correlation between doing good and actually making a profit,” says Gorell Barnes. “The companies that have a social purpose will be more successful than those that don’t.”

However, that doesn’t mean business leaders should take every chance to publicly vent their opinions. “The risks of speaking out on political issues can be significant,” says Hugo Burge, CEO of Momondo Group, the parent company of the travel businesses Cheapflights and Momondo. “If a CEO strikes the wrong chord or appears self-serving, they can swiftly alienate their potential customer base and even cause long-term damage to their brand.”

Certainly going public with a poorly considered position can prove incredibly costly for the company involved. According to the Weber Shandwick report, 45% of customers say they are less likely to purchase products from a company if they disagree with the CEO’s position. This is a lesson Dan Cathy, CEO of Chick-fil-A, the fast food franchise, learned the hard way in 2012 when he spoke out against gay marriage, resulting in boycotts of his restaurants.

And CEOs taking a controversial stance might not just see fewer customers through their doors: hitting the wrong note on a social issue could also end up hurting your employer brand. “If they strongly disagree with the views of their boss, employees may begin to feel that it’s not the right place for them to work,” says Gaines-Ross. In fact CEOs need to be aware that taking any sort of political position might risk alienating staff: Weber Shandwick’s research revealed their head honcho taking a political stance would erode the loyalty of 19% of employees. Comparatively, 26% said they’d feel more loyal towards their employer and 55% were ambivalent either way.

The risk of alienating his workforce was certainly on Almgren’s mind when he decided to publicly speak out against Brexit in the run-up to the referendum. “You should never impose your private views on your employees,” he says. “Having said that, most businesses usually have a shared mission that everyone feels strongly about and I feel that my opinion was a reflection of the company’s mission.”

Considering that speaking out on a loaded subject such as whether or not the UK should remain part of the EU could have turned both workforces and customers against them, Almgren wasn’t surprised that the CEOs he encouraged to follow his example declined to do so. And while he didn’t notice any decline in sales, Almgren is aware that his decision didn’t sit well with some of the artists who sell their work through Artfinder. “People obviously had very strong opinions both for and against,” he says. “Not all of them agreed with me but fortunately no one left the site after I spoke out.”

Another thing to keep in mind before speaking out on a social topic is the fact that even if the public may agree with you, they might be sceptical if they don’t understand why you’ve taken a specific position. In fact, according to Weber Shandwick’s research, 32% would be less favourable if they couldn’t tie the CEO’s activism to the company’s bottom line, compared to 20% who would be more favourable. 

Given the public’s scepticism and the fact that CEOs are the faces of their companies, entrepreneurs are still advised to tread carefully before climbing the barricades and proclaiming their political allegiances. “Make sure to share your views with the board, your senior team and try to find out what your employees think beforehand,” says Gaines-Ross. “Make it clear why you are speaking out, whether you feel it’s a personal moral obligation or if it’s tied to the values of the company.” She also encourages entrepreneurs to ensure that once they’ve taken a public stance to stick to it. “You can’t just do it once in a while,” says Gaines-Ross. “Once you’ve put your stick in the ground, you have to say it again and again and not try to return to the sidelines.”

Doing so will not only show you mean business when proclaiming to back hot-button issues, it will also help insulate your startup for the 21st century. “The companies of the future have seen that they have to have a social purpose,” says Gorell Barnes. “CEOs are realising that they have to strive for something and therefore their voices are hugely important.”

Given that the potential benefits startups can gain by having their C-suite speak out and the fact that millennials endorse entrepreneurs that do, those future companies look destined to see their corporate chieftains take a stand in the years to come. “This is not a trend,” concludes Gaines-Ross. “We are going to see a lot more of this.”

 

Should CEOs speak out on political issues?

Clockwise from top left: Daniel Hegarty, Hugo Burge, Phil Foster, Thomas Villeneuve

Daniel Hegarty, founder & CEO, Habito

CEOs should voice their opinions on politics. We’ve all got a responsibility to raise the debate quality around important issues. But it should be taken as a personal view and not a reflection of the business or staff. The risk is that a CEO’s views can be polarising for staff or customers as people struggle to separate the business from the individual involved.

Hugo Burge, CEO, Momondo Group

Companies play broad, major roles in society, so it’s natural that CEOs speak out on certain political issues, especially because so many could impact their business, employees and customers. The best businesses should be a part of these discussions to help make things better for people, so having a strong voice should be a positive thing and part of the responsibility of the job.

Phil Foster, managing director, Love Energy Savings

When you’re in a position of influence, it’s important to understand your audience’s diversity and always comment on potentially divisive issues with sensitivity and awareness of the bigger picture. As long as you can back up an opinion with evidence and reasoning, there should be no reason why you should not provide advice and insight to help others become better informed.

Thomas Villeneuve, CEO, Weroom

CEOs should speak out on issues affecting their workforce or consumers. When I’ve made political statements, I’ve been driven to do so on topics linked to themes like housing policy changes or Brexit, which ultimately will have an impact on those who use our services. If you are fortunate enough to have a platform to speak from, you should use it to give voice to those who do not. 

About the Author

Eric Johansson

As acting web editor and resident Viking, Johansson ensures EB is filled with engaging and eclectic entrepreneurial stories. While one of our most prolific tech writers, he has sharpened his editorial teeth by writing about entertainment and fitness. Follow him on Twitter at @EricJohanssonLJ to catch up with his stream of consciousness.

Our Partners

Event Media Partners