Many business leaders are feeling the heat in this season’s fiercely contested U.S. presidential election.
Gone are the days when CEOs could focus solely on profit margins and product innovation. In today’s hypercharged sociopolitical landscape, they’re often expected to be social commentators, moral judges, and political activists—even on issues far removed from their core business—whether they want to be or not.
The pressure is relentless and comes from all sides, peaking during the Coronavirus pandemic but lingering in the aftermath. According to the 2022 Edelman Trust Barometer survey, 60% of respondents expected employers to take public positions on controversial societal issues. Recent research from Weber Shandwick shows that 65% of employees believe their companies have a responsibility to speak up about critical issues, even when they’re controversial. That pressure is even stronger from consumers, with as many as 80% saying companies should take a stand. Moreover, more than half of the consumers surveyed said they had supported or opposed a company because of its positions or actions.
In this tinderbox environment, when a tweet, press release, or even silence on a trending issue can ignite a firestorm, the stakes for CEOs have never been higher.
How can leaders navigate these treacherous waters? As a CEO coach and consultant, I have advised leaders on meeting the challenge without capsizing their companies or compromising their values.
Here’s how.
The Shifting Landscape of Corporate Leadership
The role of the CEO has evolved dramatically in the past decade. Beyond running profitable companies, today’s leaders are expected to be moral compasses, addressing everything from social justice to climate change.
Platforms like Twitter, Instagram, and Glassdoor have given consumers a direct line to corporate leadership and employees public platforms for grievances. Younger employees, particularly Millennials and Gen Z, are vocal about their expectations that employers positively impact society or the environment. Deloitte’s research shows that nearly nine out of 10 Gen Z and Millennial workers say purpose is key to their job satisfaction. Increasingly, these younger workers are rejecting employers whose values don’t align with their own.
When CEOs Should Speak Out
When an issue directly relates to a company’s core values, speaking out can reinforce brand authenticity. Nike’s 2018 campaign featuring Colin Kaepernick is a prime example. When the then-San Francisco 49ers quarterback started kneeling during the national anthem to protest racial injustice and police brutality, his actions drew both support and backlash. Nike took a strong supportive stance with ads encouraging customers to “Believe in something. Even if it means sacrificing everything.” The shoe giant’s sales increased by 31% in the following quarter.
Similarly, Salesforce CEO Marc Benioff’s advocacy against Indiana’s Religious Freedom Restoration Act in 2015 resonated with employees and customers. Salesforce’s revenue grew by 24% that year.
When leaders have a genuine, personal connection to an issue, their advocacy can be particularly impactful. For example, the outdoor apparel company Patagonia has made environmental causes central to its identity and reaped bottom-line rewards.
When CEOs Should Exercise Caution
But sometimes, taking a stance on divisive issues can alienate stakeholders. This is particularly true if it seems inauthentic or contradicts the values of customers or other important constituencies. Former Chick-fil-A CEO Dan Cathy’s comments on same-sex marriage led to boycotts, and the company eventually promised to stop donating to anti-gay organizations.
Equally important, your stated position should align with your company’s actions. Amazon faced criticism in 2020 for its support of the Black Lives Matter movement while simultaneously facing scrutiny over its treatment of warehouse workers, many of whom are people of color.
Finally, if you’re going to speak, be strategic and informed. The case of Under Armour’s CEO Kevin Plank serves as a cautionary tale for corporate leaders engaging in political commentary without thorough consideration. Plank’s off-the-cuff remark calling then-President Donald Trump “a real asset for the country” just a few weeks after he took office quickly spiraled into a PR crisis for the company. Brand ambassadors protested, consumers boycotted and financial analysts downgraded the company’s stock. Whatever your personal or political opinions, it’s critical to read the room when deciding to share them publicly.
Striking the Right Balance: A Strategic Approach
To navigate this complex landscape:
Be Authentic: Authenticity is crucial when taking a public stand on controversial issues. Your stance must align with your company’s values and mission. Today’s customers seek brands that reflect their beliefs, so being genuine can strengthen loyalty among those who share your values, while insincerity may alienate them. Your employees want to work for a company that stands for something meaningful, and authentic leadership can boost their engagement and pride.
Know Your Audience: Understand your stakeholders’ values and expectations. Tailor your messaging to resonate with their concerns and priorities and the broader social and cultural context in which they operate. Failing to align with these expectations can lead to miscommunication or backlash.
Weigh Risks and Benefits: Conduct a thorough analysis of potential impacts. Tools like sentiment analysis and stakeholder mapping can provide valuable insights into how different groups may react, helping you anticipate possible risks and maximize the positive outcomes of your actions.
Back Words with Action: Ensure that tangible efforts support public statements. Empty promises or token gestures can erode trust, while genuine, consistent actions that align with your words will strengthen your credibility and the long-term relationship with your audience.
Consider Timing: The when and how of speaking out can be as crucial as the what. During the COVID-19 pandemic, CEOs who quickly pivoted their businesses to address the crisis (like LVMH producing hand sanitizer) were viewed more favorably than those who remained silent or were slow to act.
The Future of CEO Activism
In our divided world, when pressure on CEOs to engage with societal issues is unlikely to diminish, leaders can navigate this new landscape effectively by carefully considering when and how to take a side. Those who succeed will enhance their brand’s reputation and contribute meaningfully to their communities and our society. The key lies in striking the right balance between engagement and restraint.