Why CEOs should think twice before challenging politicians
Standing up for your values is all well and good but be prepared for a backlash.
Activist CEOs are nothing new but while some may believe that CEOs have done the right thing in facing President Trump head-on, they actually need to be wary about the potential impact on their respective reputations.
Speaking out may gather positive headlines and admirers but it can also reinforce the idea of a liberal, often extremely rich, elite standing against elected politicians. The emphasis is on elected, not self-appointed guardians as some of the CEOs seem to be. There is also a distinct risk that they are saying and doing things that their customers and employees do not agree with.
This doesn’t mean they should not take a stand but the approach needs to be completely authentic and their organisations need to be operating in a similarly ethical manner. In other words, they need to get their own house in order first.
The role of activist CEO seems to apply to the new wave of global mainly tech CEOs who are standing against Trump partly because they recognise the impact on their businesses (the need to attract global talent, global finance and access global markets) and partly no doubt through a genuine revulsion of what he is doing. But this risks highlighting differences between old and new industries. Maybe some of those more traditional industries believe that making America great again could help them become great again?
An activist CEO needs to think about:
1) Aligning their business activities with the statements – some of the activist CEOs have their own challenges across employee relations, sourcing of materials and, particularly, tax. Being an ‘enlightened’ CEO is all very well as long as your own organisation operates in an enlightened way. Given that many are subject to boycotts, campaigns and legal challenges this would not always seem to be the case.
2) Not shouting louder than their organisations – even a brief look at the websites of the few of the firms that have been shouting loudly about the President’s travel ban reveals either no mention of the issue or vague euphemistic talk of ‘urgent times’. Truly activist CEOs need the organisations they lead to reflect their positions. The danger otherwise is that they are easily accused of playing both sides – the CEOs get the activist credit whilst the organisations continue business as usual and general consumers will be none the wiser.
3) Whether this could be seen as cynical? – for some of the organisations making stand, it could be argued that they helped caused the problems in the first instance for failing to deal with fake news, not having effective security measures in place to prevent hacking, allowing too much air time to certain candidates etc. The approach may be genuine but, from a cynical perspective, it helps move the spotlight away from their initial inaction. Others may think that the comments are a guilt trip.
4) US vs the rest of the world – much of the latest activism has been US based but to be active in one country means not being silent in others, even if they represent potentially lucrative markets. It should not be forgotten that the UK will have its own issues to contend with regarding immigration and openness to global talent post-Brexit.
The activist CEOs also need to be aware of the political, regulatory, and public pressure that could come. The idea that there won’t be a backlash is naïve. Whether that comes from a Presidential tweet or something more organised and consistent is not yet clear. But that won’t take long…
As published by Management Today