When a CEO gets political, the reactions are usually mixed.
No corporation is immune to accusations of woke-washing. At the same time, consumers and employees have come to expect business leaders to make good use of their considerable influence. That’s why it’s curious that so few business titans have come out with a clear statement favoring one presidential candidate over the other in the current US election.
Why haven’t we seen more memos like the one Expensify CEO David Barrett recently sent to his customers, urging people to vote for Joe Biden? “As CEO of this business, it’s my job to plot a course through any storm,” he wrote, and four more years of Trump leadership “will damage our democracy to such an extent, I’m obligated on behalf of shareholders to take any action I can to avoid it.”
Earlier this week, more than 600 business school professors signed an open letter to CEOs asking them to speak out against Trump in a similar fashion, citing “a President who denigrates science, peddles in lies, incites violence, attempts to delegitimize the press, politicizes everything from the justice department to the CDC to the postal service, and seeks to undermine the integrity of American elections.”
But shouldn’t leading executives be clamoring for a Biden win without any prompting?
Ninety of the Fortune 100 companies have recently issued Black Lives Matter (BLM) statements. One candidate, Biden, has made unequivocal statements in favor of the movement; Donald Trump, by contrast, retweeted a video of one of his racist white fans shouting “White power” twice at a protest over race (he later deleted the retweet). Trump also refused to denounce white supremacy on national television.
To be sure, BLM declarations are an imperfect proxy for supporting Biden. Then again, Trump’s racism has permeated many of the policies that have prompted strong responses from corporate America. Meanwhile, Biden’s climate plan and views on immigration are also more closely aligned with those of many large, powerful companies.
Still, CEOs will walk right up to the line dividing the support of ideas and the endorsement of a candidate who embodies those ideas and stop. CEOs are not talking with their wallets either: The Wall Street Journal reports that only six chief executives from Fortune 100 companies have donated to either candidate, four for Biden, two for Trump.
What’s going on? What’s the right thing to do?
Quartz put the question to a philosopher and expert on leadership ethics, a business professor who signed the aforementioned open letter, a longtime HR executive, and a management scholar.
Joanne Ciulla, a philosopher, and the director of the Institute for Ethical Leadership at Rutgers Business School, says the issue is fraught.
From an ethical point of view, leaders have to consider whether an outright endorsement of one politician or party would frighten some employees and create a hostile environment for those whose political beliefs are not aligned with the CEO’s. “That’s a serious issue,” she tells Quartz, “Imagine that [Barrett’s] note said he really valued democracy, and you should vote for Trump. I think some people would find that intimidating.”
This is not a time to allow your personal political views to cloud your judgment, she says. Sure, she agrees with Trump critics who believe “the president is morally reprehensible” and harming democracy. “But you have to remember, there’s a whole segment of people in America who don’t think that or think that it’s not a big deal, because they like him, and they support him.” she says. “You have to imagine those people, because this is about their employment.”
“You have to remember that someone in a position of authority over someone’s livelihood has an impact on them that is different than you and I talking as citizens to each other,” says Ciulla.
The major difference between a CEO embracing Black Lives Matter activism and endorsing a candidate is that the first is a social cause, “and the other is a private individual choice that is supported by the Constitution,” she says.
Indeed, part of the reason US elections adopted a secret ballot system long ago was to prevent employers from forcing their employees to vote a particular way, as Jill Lepore, a Harvard historian and writer, explained in a recent episode of NPR’s Throughline podcast.
Until very recently, corporate leaders also had to abide by century-old restrictions on political advertising and spending. The Supreme Court’s Citizens United decision, in 2010, changed that. Today, there’s nothing to stop company leaders from making political statements or spending lavishly on campaign donations.
Ciulla would have preferred that the business school letter had urged CEOs to either stop donating to the Trump campaign (though few have), or to give to the Biden campaign, which would have less impact on employees. A good start to practicing good corporate social responsibility would be “not paying billions of dollars to lobbyists to influence politicians to look after their interests, when their interests do not coincide with the public interest,” she asserts.
But using one’s corporate megaphone to cheer for one candidate is not ethically sound. Perhaps, it’s less questionable at a small company where everyone generally agrees on the issues, or at firms in regions where people already tend to vote overwhelmingly one way, says Ciulla. If politics are part of the company’s culture, too, that’s a different story in her mind. But at the average national company, CEOs should probably keep their views to themselves.
“You really don’t want businesses interfering with social issues, because that’s not the way democracies are supposed to work,” she tells Quartz. “Just because they’re rich and powerful, doesn’t mean that they get to have a bigger voice than the people who vote in elections.”
From a strategic point of view, endorsing a political candidate can lead to trouble.
“My research suggests that there is a risk to companies who take stances on social political issues,” says Vanessa Burbano, an assistant professor of management at Columbia Business School. “The social political issues are polarizing; there’s no agreement among the general populace, obviously, on what is the quote-unquote right stance, and so I think it makes it tricky.”
If a CEO stays mute on a topic, most people will assume that their values and voting habits are aligned with that of the leader. “That’s just human nature,” says Burbano.“When an employer or a CEO comes out with a stance that is congruent with yours, that’s not really surprising. People just say, ‘Okay, that’s nice,’ and move on,” she adds.
However, when someone learns that the big boss backs a position that opposes their own, it’s a shock. “There’s a greater demotivating effect when individuals disagree with the stance, compared to the motivating effects when they agree with the stance,” Burbano explains, and the drop in morale hurts the employee’s productivity and engagement levels.
Burbano’s current, not yet published, research suggests this effect may be amplified in younger staff members, which is in keeping with other findings about Gen Z’s activist leanings.
The professor isn’t suggesting that corporate strategy or profits are or should be the only considerations when an executive is weighing whether to go public with a political message. “But in terms of understanding down the line what the effects might be on the bottom line,” she says, “it’s important for companies to be aware of what the pulse is amongst their employees, and amongst consumers, or be willing to accept that their employee and consumer base may change in the future, as a result of these stances.”
In some cases, company leaders have seemingly decided that the risk is worth taking and that could become more of a trend, says Burbano. “Maybe we’re moving into a world where companies, or the CEO, says, ‘You know, I think we would be more successful if all of our employees are sort of homogeneous in our stances, and we sort of agreed on these types of things.’” Maybe in a few years, she speculates, “people will show their approval or disapproval of these stances by where they choose to work”—at which point, taking a stand wouldn’t be risky at all.
CB Bhattacharya, a professor of sustainability and ethics at the University of Pittsburgh’s Katz Graduate School of Business, is one of the more than 600 business school professors who added his name to the open letter to CEOs, penned by Harvard Business School’s Deepak Malhotra, and signed by several prominent thinkers. It asked those who already planned to check the Biden box to share their views with the wider world, saying this wouldn’t be a political act at all. “It is an act of conscience,” Malhotra wrote (emphasis his).
Bhattacharya agrees wholeheartedly with that sentiment. Generally speaking, he feels that businesses should not be politicized, unless a company’s products are “intricately and intimately linked with politics.” Dick’s Sporting Goods choosing to stop selling guns is a good example of appropriate engagement with a contentious topic, he says. But Procter and Gamble and other companies selling soap, or toothpaste and other mass market products, he adds, “I don’t think they should be taking a stand.”
This year, however, those rules no longer apply, says the professor. “This is the most extraordinary year in the history of our elections. Any individual with a modicum of ethics would be remiss not to stand up and speak for what is right,” he tells Quartz. “What has happened to this country in the last three years or four years, and now with the pandemic—this is callousness. Just complete, disregard for human life, for human dignity, for human decency.”
For Bhattacharya, also the author of Small Actions, Big Difference: Leveraging Corporate Sustainability to Drive Business and Societal Value, Trump’s record on sustainability is one of many reasons that he felt it was time for CEOs to embrace politics. “This person is driving the entire planet into the ground with his policies,” he tells Quartz. “But you can take policy after policy, any policy, I can tell you that it’s just a completely wrong way to do things.”
If a CEO advocates for a Biden win, “absent any threat of punitive action, I really don’t think that it should impact the employee,” he insists. Voting is still a personal choice and an employee’s privacy is protected.
The HR executive: Companies are pushing voting like never before “and I doubt that’s because they want the status quo.”
If CEOs are feeling called to make political endorsements this year, Cathy Hart, president and CEO of Slainte Group, a management services firm in Minneapolis, says chief human relations officers around the country are likely interrogating them about their reasons why. “I would say, ‘Okay, what are you trying to accomplish and how could this affect our organization?’”
Not only CEOs, but senior executives perceived as powerful, need to think hard before publicizing their political views, she says, whether they run a public or private company, or a non-profit, and regardless of the industry, region, or size of the firm. “You don’t want to affect the reputation of the business, and you don’t want to potentially damage customer relations,” says Hart. “The more neutral you can be, the more fair the workplace feels.” Employees will inevitably feel pressure or fear being penalized for standing out as different, she thinks.
Hart knows this from fielding visits from staffers at a former employer, where she led human resources. The company was owned by a deeply religious family that made well-meaning faux-pas—like offering all employees ham at the holiday season—that led to a “low-grade anxiousness” among employees who worried about not being accepted.
“From an HR standpoint, anytime we’ve had anyone from particularly senior level leadership starting to become a little more vocal about specific [political] or religious beliefs—not even necessarily an election or candidates—we’ve always asked people to be cautious about what they share,” she says. Though it is a balancing act: “You want to encourage diversity, but at the same time, you have to be careful that you’re not trying to influence people,” she says. “You want to celebrate your differences, but when you’re the person in a position of power, it can really backfire.”
Even seemingly benign acts, like supporting gay rights in the workplace, require a mindful discussion first, says Hart. “You could say, we’re welcoming, and we love everybody, but somebody’s still going to hate that,” because it conflicts with a personal belief, she says. “But for the most part, you put down your roots for your culture that you want, and can easily make statements that are supportive of that.”
Weighing in on an election is far harder, if not impossible, to justify—at least today, she argues. “I think it’s a lingering question in the HR executive community: How is this climate going to affect how things are done in the future? Is it just a blip historically, and we’re all going to go back to a level of decorum and mutual respect that doesn’t require that much activism? Or does this propel the corporate world in a different direction?”
In this election, Hart sees CEOs and companies taking a coy approach to activism by pushing the ostensibly neutral message “Go vote” and making noise about their time-off for voting policies. “Everyone’s obviously been allowed the right to vote, but nevertheless, a lot of companies are pushing it so much more than we’ve ever seen before,” she says, “And I doubt that’s because they want the status quo.”