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Corporate Activism: Look Before You Leap

Posted on June 13, 2022 by Nick Kalm
corporate activism, Reputation Partners

This article originally appeared on O’Dwyers: Corporate Activism: Look Before You Leap

Cheered on by many in the media and large PR firms, corporate activism has been on the rise for years. It has particularly accelerated in the past year or two.  However, what is almost always missing from this discussion is any concern or deliberation about the consequences and potential pitfalls of doing so. 

One has to look pretty hard to find any voices expressing caution, but they exist. It’s not as difficult to find companies that have stubbed their toes by not thinking these challenges through – Disney and State Farm are just two of the latest. Undoubtedly more will follow, though it’s notable that caution among many companies prevailed when the draft Supreme Court decision about Roe v. Wade recently leaked and the media sought comment. There are a few other signs that corporate caution is beginning to prevail. And, after pushing the topic hard for years, even PR thought leader Richard Edelman is now tapping the brakes a bit.

As a communications counselor who has spent my entire career trying to help companies escape, overcome or avoid controversies, I’m a bit mystified and disappointed by the “groupthink” in my industry that ignores or downplays these risks. And as a contrarian, I am always skeptical when conventional wisdom suggests only one path forward.

The fact is: our country is bitterly divided on issue after issue. In many cases, it’s an almost even split. A company staking a position on almost anything is virtually certain to provoke an equally negative reaction from a significant portion of the country. There are a few exceptions. It’s hard to find many people who would criticize a company for withdrawing from Russia after that country’s brutal invasion of Ukraine.  It’s actually more likely a company will be criticized for not taking that action. But, that’s one of only a few issues with near-unanimous support.

To be clear, I’m not saying that companies should never take a position on a societal issue, but it does mean they shouldn’t do it rashly or without careful analysis and deliberation. 

A number of studies show that consumers and employees want companies to get involved in political issues. A few other surveys qualify that in important ways: yes, they want companies to get involved in political issues, but only if the companies’ views align with their own. Okay…with half the country divided, how is that supposed to work?

So, is doing nothing an option? Should companies listen to their most vocal employees or customers?  What if those vocal groups or individuals represent only a minority, but are just the loudest and grabbing all the attention? These are just the beginning of the questions companies should be asking themselves before wading into political issues that don’t directly affect their businesses. 

I thought I would offer a checklist for companies to consider when weighing whether or not to become involved in societal issues. Being thoughtful and deliberate means whatever you decide will be based on a more well-reasoned and defensible position, with the upsides and downsides clearly understood.

ORGANIZATIONAL ASSESSMENT

  • Why are we considering taking a position?
  • Is our organization historically known for taking political or controversial stands?  If not, are we comfortable now being seen as an organization that makes political statements or takes controversial positions?
  • Are we prepared to answer the question: “Why are we speaking up now?”
  • Does taking this position align with our corporate values or mission?
  • Does taking this position align with our corporate policies?
  • Do we have the resources and are we prepared to commit them to make a meaningful impact on this issue?
  • Would taking this or any similar position be the first time we have done so externally or internally? If we spoke up before, what was the reaction the last time?

IMPACT ON KEY STAKEHOLDERS

  • Have we heard (i.e., survey results, social chatter, internal ‘rumblings,’ etc.) and/or received direct feedback about this issue from any of our key stakeholders?
  • If we are encouraged to take this position based on encouragement/pressure from our employees, customers, legislators or advocacy groups, do we know whether those bringing the pressure represent a significant minority or majority of that group – or is it just a vocal, small minority?
  • Do we know how the following key stakeholders will react to us taking such a position:
    • Board of directors
    • Leadership team
    • Employees
    • Customers
    • Business partners/referral sources
    • Government officials
    • Investors
    • Current/prospective employees
    • Legal team/counsel
  • Has our industry/trade association already taken a position or set an expectation that we will be judged against?

FORWARD-LOOKING CONSIDERATIONS

  • If we are considering aligning ourselves with an advocacy group, have we investigated them and thoroughly first?
  • Are we prepared to be “all-in” on this issue if pressured/encouraged to do so after taking a position?  In other words, are we potentially prepared to execute a prolonged advocacy strategy supporting and advocating this position in the form of advocacy group partnerships, financial contributions to non-profits/impacted communities, creation of employee resource groups to help make a difference and related efforts?
  • If we receive pressure based on taking this position, are we prepared to stick it out no matter what?  Or are there certain conditions under which we would reverse ourselves?  And, if we reverse ourselves, how are the groups that pressured us to take a position likely to react?
  • What upsides – financial or otherwise – are we expecting to receive as a result of taking or not taking this position?  How do we know that will come true?
  • Are we prepared for the possibility of, and have we quantified the possibility of, lost shareholder value, lost sales, lost government incentives/tax breaks, lost reputation and/or difficulty recruiting or retaining employees as a result of us taking or not taking this position?
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