How To Take A Political Stance As A CEO
- CEOs are making more public statements on political issues
- But commenting on specific parties or politicians is deemed inappropriate
- Your position needs to be authentic and constructive, or risk backfiring
In recent years, more and more CEOs and business leaders have been speaking out on environmental, social, and political issues, such as racism, climate change and immigration policies, which are often not directly related to their business. This phenomenon is referred to as ‘CEO activism’.
To investigate why and how CEOs’ increasingly take a public stance on political and social issues, Christoph Cewe, a Masters in Management graduate from ESMT Berlin, conducted a study in cooperation with United Europe e.V., a pro-European organisation aiming to build and support a Europe that can ensure peace, liberty, and prosperity for future generations, as part of his thesis.
The research findings are based on a literature review, a survey of European CEOs from large corporations, and interviews with participants from different industries.
Their research reveals that CEOs are increasingly making public statements on political issues in order to make a positive contribution to society. Of those surveyed, 77.5% believe business leaders should take a stand on political issues, and 62.5% state that they are likely to express themselves in sociopolitical terms.
Cewe explains that the increase in ‘CEO activism’ could be due to greater societal expectations of businesses by the public with societal trust in politics decreasing and the trust in corporates increasing.
This has become even more drastically pronounced with the COVID-19 pandemic and economic crisis throughout 2020. In fact, according to the 2021 Edelman Trust Barometer, business is now not only the most trusted institution globally, but has become the only trusted institution when compared with NGOs, media, and government.
However, are these public stances just examples of virtue signalling, or do companies genuinely hold the position they are taking?
From their survey, the researchers identified two frequently reported reasons for taking a public stance: to contribute to society and to express corporate values. And these two motives are not independent; taking a public stance allows leaders to contribute to crucial issues aligned with their corporate values.
“The results show that managing directors express themselves publicly, primarily on political issues, so that they can use their influence to make a positive contribution on socially relevant topics. Personal motives and potential advantages for shareholders do not play a greater role,” says Cewe. To my surprise, and potentially many others, CEOs aren’t just doing it for themselves when it comes to speaking out.
In 2020, many organisational leaders took a public stance after the death of George Floyd. Some leaders not only supported the Black Lives Matter movement with a public statement, but also committed resources and took action to support sociopolitical change and combat structural racism.
This included Nike’s CEO John Donahoe. In addition to publicly supporting the Black Lives Matter movement, he announced Nike’s commitment of $40 million to supporting black communities, assured to increase pay equity, and released the campaign “For Once, Don’t Do It” to raise awareness of structural racism.
Their research also identified the areas perceived by CEOs as being the most appropriate to take a public stand on: these included environmental (97%), economic (87%), and social (82%) issues.
However, when it comes to politics, Cewe explains that CEOs need to be careful. Although more than half of the participants reported that they find it appropriate to publicly speak against political extremism, only 8% consider commenting on specific parties or politicians to be appropriate. This could be because extremism and populism are not purely political issues, but societal issues. This suggests companies and CEOs have more of a social responsibility than a political responsibility.
Cewe continues, “European CEOs want to add value with their public statement, but do not want to take a party-political stance. Thus, ecological, economic and social issues are identified as the most suitable topics for public comment.”
The researchers also looked into which factors CEOs should consider when deciding if a public stance is appropriate. Firstly, the stance needs to be authentic and consistent with their business’ activities and values. In 2020, Chick-fil-A’s CEO Dan Cathy took a position against racism, which should have been seen as a positive thing. However, up until as recently as 2019, the company had a history of supporting anti-LGBTQ organisations, so their anti-racist stance was seen as inauthentic and heavily criticised on social media.
Secondly, respondents stressed that taking a stance should not be about gaining media attention. It should be about bringing key societal issues to the forefront and making a positive contribution.
“For many European CEOs, political commitment is a relevant topic, but CEOs do not bear political responsibility. They must be able to maintain a balance between business competence, public credibility, and an understandable interest in social processes,” says Günther H. Oettinger, former EU commissioner and President of United Europe e.V.
Cewe’s research alongside United Europe e.V. demonstrates that political and social engagement is becoming more and more relevant amongst business leaders. Therefore, a business leader should know one’s values and lead with integrity.
When it comes to expressing a stance publicly, authenticity is vital. Recently, the cookie brand Oreo tweeted “trans people exist.” Instead of being met with swathes of appreciation from the trans community, the company was heavily criticised online, accused of virtue signaling and not actually doing anything practical to support trans rights. Insincere public stances are quickly exposed online and lead to immediate negative consequences for the leader and their business. In today’s social media landscape, large amounts of criticism online can even lead to public figures being ‘cancelled’ by the public. See Laurence Fox or J.K. Rowling after her public statement on trans rights.
Finally, Cewe suggests that leaders should not weigh in on every possible opportunity to gain media attention. They should instead use their influence to contribute to issues of a crucial societal nature where their input can drive the issue forward and genuinely have an impact.