“Should I stay, or should I go?”, asked The Clash back in 1981. “If I go, there will be trouble, and if I stay it will be double,” they concluded a few lines later.
Trouble or double. When your company gets caught in the vortex of a social or political issue, it can certainly seem that way in today’s polarized environment. Could we/should we make a statement? Could we/should we take action? Each situation is unique, but one thing is true: you can’t just stay … still.
Even if you decide to do nothing, that decision is something. Only a few years ago, companies could stay out of or minimize their role in the social and political discourse. It’s not so simple anymore. Expectations have changed and the concept of what creates value has broadened. Shareholder primacy is no longer defined by an exclusive focus on driving sales and profits. Consideration is now given to how sales and profits are generated: Is it in a manner consistent with company purpose and values? Have the impacts/implications for customers, employees and communities today and the future been considered?
It is this essential understanding of what the company is and does that serves as a basis for deciding whether to enter the fray. Communications experts agree companies should have a disciplined approach for deciding what issues are pertinent and relevant. Spend some time hashing-out company values and convictions to develop a framework for making the “stay or go” decision. Some questions to ask yourself include:
- Does the issue impact the company? If yes, how so? Does it affect the company’s ability to serve customers, attract and motivate employees or operate effectively?
- What are the implications in view of the company’s core values?
- Does it potentially affect perceptions of the company? If yes, how so and with which stakeholders? How may the potential change in perceptions impact the company and its prospects?
Even with a framework, many executives, boards and lawyers will want to remain neutral for fear of alienating customers, communities or influencers. However, the days when companies can stay on the sidelines may be over. That was a conclusion of a Harvard Business Review article, (March 7, 2018, Korshun & Smith), which outlined how an understanding of what stakeholders look for can help moderate the potential fallout of expressing a view: These include:
- Transparency: Trusting relationships are built on openness and transparency. Stakeholders typically accept a company’s position if they believe the company has been forthright.
- Consistency: Companies should be true to what they stand for and predictable in their actions. Surprises or changes in direction weaken trust, leading stakeholders to doubt a company’s real intent.
- Materiality: Stakeholders aren’t naïve. They understand and expect companies will take positions favorable to its business. It’s more important to be upfront and true to your word when sharing the company’s perspective.
- Leadership: By being transparent, consistent and presenting a forthright business case for its perspectives, a company will more likely be respected even if stakeholders don’t agree.
A recent example of a company doing this well is JP Morgan Chase. As discussed in a previous blog post, CEO Jamie Dimon addressed several relevant public policy topics in his annual shareholder letter, increasing transparency and better positioning JPM to respond should it get caught in the crosshairs of debate.
While senior management has the primary responsibility for addressing relevant, material issues (political ones included), the board should be aware of the company’s framework for addressing such issues and be kept apprised as situations evolve. I suspect that Dimon’s letter was vetted at several levels of the organization – board included – to ensure all were comfortable with the perspectives shared.
On a final note, I’ve approached this topic from the corporate vantage point. However, it shouldn’t come as a surprise that some CEOs have strong personal perspectives on a variety of topics, not all of which are pertinent to their company. In such cases, it’s important to carefully delineate when the CEO is expressing a personal opinion or the company’s position.
Lead-IR Advisors, Inc.
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