Should CEOs Preach?

My father would never put a political bumper sticker on his car. An owner of a small business in the 1960s—and a Kennedy Democrat—he figured there was no need to offend customers. Believe it or not, there were Republicans in Massachusetts.

Massachusetts still has a few Republicans within its borders, but the days of political neutrality in commerce are long gone. Business owners and executives don’t seem shy anymore about climbing up behind the bully pulpit. Earlier this year, the CEOs at Starbucks and Salesforce.com spoke out on social issues. Companies have gotten in the middle of the marriage equality debate. And still others are in the spotlight by way of political contributions. But is such advocacy a good idea?

Like all things, it depends. In the recent cases, the reaction, outside the companies, was mixed. If things go wrong, companies and their CEOs might just suffer a temporary setback or embarrassment. Sometimes customers and employees don’t raise an eyebrow if the CEO is known for speaking out.

But for most preachy CEOs, this is uncharted territory. To get a better grip on the subject, I turned to a few folks who know a lot more than I do. Among them: Stephen Arbogast, a former ExxonMobil executive and a finance professor at the University of North Carolina’s Kenan-Flagler Business School; Luke Lambert, CEO of public relations firm G&S Business Communications, whose clients include agribusiness giant Syngenta and General Electric; Verne Harnish, author of “Scaling Up (Rockefeller Habits 2.0)”; and Marcelo Nacht, managing partner of Praxis Research Partners, whose client roster includes UPS and MetLife.

Make sure there’s a real purpose.

“Is this well-considered advocacy?” asks Professor Arbogast. “Do most of our customers and employees like this position?” If not, he says, it doesn’t pass muster. For example: No one, or almost no one, would object to a company’s campaign to raise awareness of domestic violence. Questioning the science behind climate change? That’s a bit less clear-cut.

Do these views reflect the company?

“CEOs who use their public personas to effect social change have a responsibility to do so in a way that aligns with the company’s corporate culture, brand, reputation and business goals,” says G&S’s Lambert. For example: A business that publically operates under certain religious principles generally avoids heat from customers, largely because the company has always been transparent about those beliefs—and those views have come to represent the company.
It also helps when the CEO is completely in character. “The world almost expects (Starbucks CEO Howard) Schultz to enter the fray on issues,” says Harnish. Ditto for Marc Benioff who was known for his public philanthropic efforts—such as the Tibet House benefit concert at Carnegie Hall—well before he and his company, Salesforce.com, became stars.

Consult the board.

If the CEO is going to expend a lot of energy on the stump, is it being done for the benefit of the company? That’s a good question for company directors. “If they’re going to take company time, it better be for company purposes,” says Arbogast. “It better not be ‘I’m bored and restless and looking for new worlds.’ ” In that case, he says, it “needs to be questioned.”
Adds a C-suite consultant for Fortune 500 companies: “When it comes to public image, the CEO and the directors have to figure out guidelines together.”

Start a foundation.

Warren Buffett’s family foundation has donated to Planned Parenthood. That organization may not be popular with, say, the customers of the individual Berkshire Hathaway entities such as The Pampered Chef. But it isn’t Berkshire making those contributions, and that helps insulate the CEO—and the parent company.

Launch customer research.

Learn what your customers and employees are thinking before you dive into the deep end. “They may want to have a better feel about whether their customers are willing to climb out on a limb with them,” says Nacht of Praxis.
Lambert agrees. In a recent G&S study, 41 percent of Americans said human rights issues were “very influential” in their brand purchases. “We’ve been conducting this survey for several years,” says Lambert. “What it tells us is that if an issue doesn’t tug at your heartstrings, then it isn’t going to affect what comes out of your purse strings.”

Can you avoid public backlash if you run a private company?

No. All companies, even those that are privately held, have constituencies—vendors, customers and employees. And all have the ability to disrupt your business if they don’t like what they hear.
That’s what my dad would tell you.

Authors

  • Hank Gilman

    Contributor, Korn Ferry Institute