By Bruce Bolger
Why Politics, Social Issues and Business Don’t Mix
Advice to CEOs: Measure Your Firm By How You Treat Your Employees and Other Stakeholders
EEA Policy on Public Statements on Social, Political, or Religious Issues
Many large organizations have gotten themselves into a pickle by taking stances on political, social. or other issues outside of their core purpose, goals and objectives. As explained in this recent ESM article, Opinion: Why Stakeholder Capitalists Stay Out of Politics, stakeholder capitalism principles focused on enhancing returns for investors by creating value for employees, customers, supply chain and distribution partners, communities, and the environment would suggest that CEOs should only get involved with an issue external to its business when directly related to its purpose, goals, and objectives.
In a recent edition of Fortune CEO Daily, Publisher Alan Murray writes, “Top communications advisers tell me they are fielding nonstop questions from CEOs on a broadening array of related issues. Does the killing of innocent women and children in Gaza merit any less outrage from corporate communicators than the killing of innocent women and children in Israel? If employees use internal company communication channels to push for the rights of Palestinians, is that inherently offensive to Jewish employees? Do statements of support for Israel translate into a denial of the rights of Palestinians? Should employees be allowed to participate in proliferating protests staged by both sides? Emotions on these issues are running high, and employees are looking to their employers for support.”
On the other hand, a recent survey by Morning Consult published in Ad Age found that over half of consumers don't want to hear about the political views of companies. A recent survey by Gallup found a similar result; only 41% want companies wading into politics.
Business owners of private companies of course have the right to stand up for their views, but does doing so support the purpose, goals, and objectives of the organization? As recently reported by the Times of Israel, after the owner of a small chain of coffee shops in New York City began fund-raising for Israel’s emergency service and placing posters of Israeli kidnapped captives in store windows, some Palestinian employees began to wear pins at work in subtle support of their side. This reportedly led to a dispute with a manager, leading two employees to resign on the spot and others in the coming days. Local Jewish residents came to the owner’s defense and stepped in to help, and the owner has received US national news coverage for the lines out the store's door of customers coming to support the store. So, now a restaurant that presumably felt welcoming to all is profiting by being a symbol of division. Was that the purpose, goals, and objectives of that coffee shop owner when his family founded it? Was it founded to support Israeli causes? Is this a sustainable model as the fervor dies down? Interviewed on national news, the owner says he was heartbroken when his employees quit because he considered them family. If they were like family, did he discuss with them his decision to publicly display his fund-raising efforts for Israel in the store?
Undoubtedly, the owner could have used his own private means to support his convictions, attend demonstrations, raise money under his own name, or at least consult with his employees and customers before taking this stance, unless of course the cafe was transparently founded to support Israeli causes, which does not appear to be the case.
To help provide guidelines to CEOs on making public statements, Leo E. Strine, former Delaware Supreme Court Justice, an early advocate of stakeholder capitalism principles and for the public benefits corporation statutes, and now Of Counsel at Wachtell Lipton says in an Enterprise Engagement Alliance podcast last year:
“Companies should measure themselves primarily on how they treat their employees and other stakeholders--are they open to employees of all races of all sexual orientations and preferences? Is the workplace tolerant and free of harassment? Does the company pay a living wage? Are the communities in which it operates better off? Do they give to local charities? Are the facilities safe and non-polluting? Are the products safe and fit for their purpose and make their consumers better off? Are they paying all the required taxes? That's the real test of being a quality business. Business should leave the politics to their stockholders, their customers, and other stakeholders and focus on being a good business. And if they do that, they'll probably bring out the better angels in society's nature because they'll set an example that's positive, and they'll also probably reduce controversies because they'll be welcoming to Americans of all kinds to do business with them and work for them.”
Of course, CEOs and other executives retain their personal and private rights to donate to and support the causes that are close to them, under the same conditions as all other employees, as long as done so under their own name, without involving the company.
To avoid continual pressure from different stakeholders, the simple solution is to issue one single statement on the organization’s policies related to making public statements clearly displayed on its web site, employee portal, and corporate sustainability report.
Here is a sample of the Enterprise Engagement Alliance statement slightly modified for large companies from which anyone is welcome to be inspired.
(Please note this statement has been slightly modified for the purposes of a larger organization with employee resource groups and a diverse population. Click here for the EEA’s actual statement.)
The Enterprise Engagement Alliance’s purpose is to promote a strategic and systematic approach to enhancing returns for investors by creating value for customers, employees, distribution and supply chain partners, communities, and the environment. Click here to learn about our purpose, goals, objectives, values, and metrics.
The Enterprise Engagement Alliance welcomes people of good faith from all parts of the world, political parties, religions, ethnicities, gender types or preferences, etc. who wish to contribute to and share efforts to enhance returns for investors and society only by creating value for customers, employees, supply chain and distribution partners, communities, and the environment.
To ensure that all feel welcome, the EEA will not issue any public statements, make any political or other contributions, or other comments on any issues outside the purpose, goals, objectives and values of our organization, nor use any of its resources to directly or indirectly support such efforts. In addition, we will not support or make any contributions to political issues unless directly related to the purpose, goals, and objectives of this organization and never for the purposes of supporting a specific political party. In the unlikely event that the EEA supports a specific candidate or cause with publicity or financial support, it will disclose so transparently.
The EEA supports the right of people of good faith to protest peacefully in a constructive means to express their outrage and we hope to promote solutions to their grievances as well as the peaceful dignified resolution of all conflicts among the parties involved, as long as that effort does not include the EEA's name, resources, online or otherwise, without the written consent of the CEO or, if a policy issue, the board.
Because our Employee Resource Groups are specifically focused on supporting employees in the context of the purpose, goals, and objectives of the organization, not external issues, individuals passionate about concerns unrelated to the organization’s focus are encouraged to lawfully use the many available legitimate external outlets to express their views, as long as their actions are done under their own name, with no association with the EEA, and do not hurt our stakeholders by doing damage to the organization’s reputation.
Anyone who is feeling uncomfortable, under emotional stress or who is otherwise affected by world affairs or perceived pressure from colleagues is encouraged to contact their support advisor in human resources.
In general principle, as part of the EEA's commitment to a stakeholder approach to managing human affairs, the EEA supports the spirit of George Marshall and the plan that forgave Germany and Japan and helped rebuild the world after World War II; and of Gandhi, Martin Luther King Jr., and Nelson Mandela as models for how to resolve conflict and move forward. We reject the concept of eye-for-an-eye and tooth-for-a-tooth as a justification for resolving any conflict in the world, in business or in our private lives. Otherwise, we respect the authority of the individual parties, entities, or countries in any dispute to resolve these issues on their own or with the support of appropriate world bodies, considering it neither our purpose nor place, nor area of expertise to resolve.
We view having the broadest possible community of committed stakeholders from around the world and all areas of business as a strategic opportunity and we abhor all forms of discrimination, cliques, or any kind of physical or psychological harassment or terror against anyone for any reason anywhere. Therefore, we encourage employees and other stakeholders to constructively express their lawful voice on their own through the many available legitimate public channels as long as those activities do not risk the purpose, goals, and purpose of our organization while they are employed with us, and to reach out to their human resources advisor if any external conditions or internal pressures make them feel unsafe.
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