Corporate Social Responsibility, PR and the Rise of CEO Activism

150 CEOs of major companies demanded the Trump administration and Congress to take action on gun violence.

In a recent segment on Fox Business, branding strategist Kris Ruby, CEO of Ruby Media Group, discussed:

  • How CEOs and their companies can ‘do good’ in the court of public opinion
  • Is CEO political activism fair to shareholders?
  • Is corporate social responsibility a great PR strategy? Or will it lead to long-term economic failure?
  • If it does lead to loss of profit, is it worth it because CEO’s are giving back to society on a larger level?
CEO activism

CEO Activism: Brands and Political Activism

Is taking a political stand a mistake for brands?

Every brand is taking a political stand these days on social media. But is it a mistake? And can it cost you profitability in the long run?

Taking a political stand as a CEO used to be considered a public relations “no.”  Now, it appears almost every Corporate Executive is changing their tune on this old adage. When did things change and why? What can we attribute to the rise of CEO activism?

  1. Millennial consumers. Consumers under 30 demand corporate social responsibility from their leaders.
  2. Social media. Social media changed the playing field. Many CEO’s are now using social media as a portal to share political views. CEO’s believe, “If I can use my power and social media network to make change in this world, then I will.”

The social media microphone of corporate executives

A lot of CEOs today, particularly in big tech, have celebrity power – a sort of bully pulpit they can work from. As I stated above, anyone selling to people under 30 has to take this into account because younger consumers demand much more corporate social responsibility from the companies and brands they buy from.

Social media has changed the speed at which this information is transmitted and the transparency of politicians’ viewpoints.

Should CEOs get involved in politics and weigh in on controversial issues?

There are expectations for CEOs to speak up on issues anywhere from gun violence to ICE raids and immigration reform.

Consumers are now relying on big brands and corporate executives to impact legislation on topics that were traditionally siloed for the government to handle.

How has this impacted integrated marketing communication strategies?  I am not sure we have seen the full ramifications of how this will impact a brands marketing communications strategy.  We are in unprecedented times.

Yes, corporate political activism seems to have skyrocketed under this administration, but at what cost? All of these decisions can have real-world economic impacts as well.  And at some point that is going to catch up.

While it is great to read the headlines of corporate social responsibility, you rarely read about the PR aftermath of partnership or vendor disputes regarding the fallout from some of these decisions.

CEO Activism: the pros and cons  

Even if the CEOs goal of political brand activism is good in nature, it can still have a ripple effect on every other part of their business.

For example, how does a CEOs political views impact their companies’ media relations efforts? Does it help or hurt them if the press has different political views than the CEO? Similarly, how does this help or hurt the CEO if their employees have different political views?

CEOs say, “Employees want us to speak on their behalf and we are using our power to be their voice.”

However, did anyone ever check what their voice was? That assumes that all employees have the same political views across the board. Employees can feel trapped working for companies that have taken a very public political stance that they don’t agree with. They are afraid to speak up because they don’t want to get fired.  They are working for someone in a political environment where if they express dissident they will be on the outskirts.

CEO Activism and workforce politics

Everyone has a right to free speech, even CEOs.

If a company takes a stand and it ends up driving away customers, the company makes less money and the company stock price goes down.  If shareholders don’t agree with a CEO, they can decide to sell the stock or hold onto it and collect their returns if the stock performs well.

Employees are in a similar situation — if they disagree strongly with a company’s opinion, they can leave. We have historically low levels of unemployment, so it’s easier for a worker to find a new job than ever before. However, just because it is easier, doesn’t mean that most employees will automatically jump ship. Instead, they can stay in the position and it can feel like a slow arduous death.

Taking a side, whether it’s principled or a gimmick, endears you to millions of people on that side.

But what happens to the other side?

For starters, companies with a strong opinion about social or political issues on the far right may not have as much access to talent.  For example, if your company publicly supports Trump, about half the country might not want to come work for you. Similarly, if your company publicly denounces Trump, what about the other half?

When speaking about CEO activism, Richard Edelman stated, “…But we’re also using the power of our employees, who are going to be our motive force.  Employees want us to speak on their behalf. And it’s an urgent time for CEOs to mobilize, in the sense, their entire supply chain of those who contribute to their businesses and get them to write letters as well.” 

“CEOs feel that they are empowered to step forward into the void left by government, that three-quarters of people, according to the Edelman Trust Barometer, now want CEOs to stand up and speak up on behalf of issues of the day.  And that’s a new kind of moment in the corporate world. So CEOs are doing so, with the backing of their employees and the backing of their customers.”- Richard Edelman

Let’s dissect this for a minute.

This statement is inherently flawed for a number of reasons.

  • It assumes that all customers have the same political view, and that all employees have the same political view.
  • This is a utopian view of society that does not take into consideration that there are two political parties in this country.
  • One cannot assume that all of their employees and customers agree with them unless they know without a doubt that 100 % of their base only has one political point of view.

Should brands take a political stand?

Business leaders are drawn into the political process at a rapid speed. But does partisanship really have a role in Corporate America, and what impact can it have on the economy? Business leaders are already entrenched with daily corporate negotiations.  Do we really need to add a halo of polarized politics on top of all of it?

Some believe that if corporate executives do not take a political stand, it is a complete abdication of their responsibility as business leaders. Does Congress want to answer to business leaders? And do consumers really want to be entangled in their favorite brand’s political preferences? Will this help or hurt business?

It is also important to note that brand activism as a PR stunt is always pretty obvious, and consumers can tell when a brand is not coming from an authentic place.

Similarly, if your short term goals are financially motivated, consumers can sense that as well.

So, where does this leave CEOs and public relations managers who find themselves smack in the middle of this burgeoning era of corporate political activism?

Should consumers rely on brands and corporations for political activism?

Yes, but only if your target audience is partisan, and you have data to back that up. If your target audience includes consumers from both parties, you should strongly consider if inserting your brand into controversial political policies makes sense. Just because it is the hot PR strategy of the moment doesn’t mean it is a profitable one for your business.

If you want to alienate half of your employees and consumers, go for it. But traditionally, companies prided themselves in caring about all of their customers.  That should include customers from all political backgrounds. As a brand, you cannot preach inclusivity, when in reality, you are actually executing corporate exclusivity, while ignoring any differing opinions.

BONUS:

Listen to the 1-hour podcast interview with Kris Ruby on CEO Activism on The Kinglsey Grant Show

CEO Activism podcast kris ruby

 

 

 

Don’t want to listen to the podcast? Read highlights from the podcast episode here:

Transcription Highlights:

PR and Marketing Pros: Do you really want to insert your brand into politics?  

When CEOs become brand ambassadors. Are CEOs the new influencers? 

Many brands state that they are non-partisan and do not endorse parties or candidates. But all of that quickly goes out the window when the CEO takes to Twitter to put their name on a partisan issue. What executives say and do matters, especially on social media marketing platforms. Gone are the days when a corporate executive could have a public view and a private one. Everything is enmeshed into one. While some brands outwardly support political candidates, the people behind the brand may have different opinions from the C-Suite. All of this can cause PR problems and the perfect storm.

Imagine this scenario: a brand publicly supports a candidate. The CEO posts a different political view. The agency and account executive post an opposing view on social media.  Can you see how this can start to confuse consumers?

Engaging in brand activism: What Marketers Should Know About Brand Activism

Controversial issues, public relations, and brand activism

The power of the media to draw public attention to particular social issues has always been a central focus of the news business. But what if CEOs of major companies now had the same power as large media outlets have as a result of social media? Could this power be harnessed for good? Or could it be used to further push their corporate agenda? Brand marketers and public relations consultants face a pressing challenge this election year.

In this podcast episode, we cover:

  • Should CEO’s take a political stance?
  • Does politics have a place in your marketing and public relations strategy?
  • When does CEO activism start?
  • The Risks of Brand Activism
  • What is brand activism?

Why are so many business leaders are engaging in CEO activism today?

CEO’s are the new Hollywood celebrities using their social media platforms to give their Oscar acceptance speech.

We are witnessing a major shift of PR strategies in corporate America, where even ten years ago, public relations professionals would tell clients to avoid taking a public stance on politics as part of their corporate communications strategy.  Today, we have gone the opposite direction where it’s a ‘cool’ thing to do for CEOs to jump in and say what they think about guns or whatever the hot topic is. They’re hopping on this bandwagon because they think, “We’re going to make real change, we’re going to tell people what we think.”  But the problem is sometimes what they said can have deep business consequences. We saw that with Nike with the tax incentives that were lost for them to build a plant.

Brand activism campaigns that backfired

Brand faced backlash 

There is a divide in America among CMOS, CEOs, brand advertisers, and publicists on what a brand marketing strategy should be and how far of a line they should cross when it comes to politics.

Consumers don’t always want the story behind the product. Sometimes, they just want the product.

You don’t always want to know the whole story behind every product you purchase. Now, that’s the opposite of what brand advertisers say today who say it’s all about the story and about taking a stance.

If you order pizza, you just want it to be pizza.  If you buy new shoes, you just want a pair of shoes.  You get a toothbrush, you just want a toothbrush.  You get a razor, you just want a razor.

We have seen brands who are willing to get involved in social issues win, but we have also seen them lose in a very big way.

Potential Risks of CEO activism CSR PR plans

  • Run the risk of losing your best employees who may not be in alignment with the CEOs POV
  • Could potentially lead to damaged brand equity over time.
  • Can irritate shareholders
  • Employees can become disengaged and productivity can decrease
  • Lowered employee morale
  • Can lose your most important talent
  • Trust can erode in your brand if you don’t follow through on issues you publicly support
  • Can develop a corporate reputation for jumping on the bandwagon for media attention

Caving to the CSR agenda may be the ‘cool’ thing to do, but it can have collateral damage that results in long-term economic problems.

There can be loss of profitability and loss of sales and revenue long term and that’s what no one looks at. In the moment, they look at what they perceive as the short-term gain which is a lot of free or media and press coverage saying, look at what this company is doing and all the social media mentions and earned media in general.  That doesn’t necessarily equate to long-term profitability. People look at short-term PR wins, but they’re not necessarily thinking, how does that actually impact how many shoes we’re selling or how many razors we’re selling? I get that people are happy about all of the earned media that they’re getting but what actually happens to the stock price long term? And what happens to the brand equity long term, because that can certainly take a hit. So sometimes people will say, oh, their stock price did fine and they did better than ever. Okay, but did they irritate a core group of consumers so much that they will never win their business back? Will they never, ever buy their shoes again? You can’t necessarily look at that as seeing that short term with sales results, you need more time to see the ripple effect of that.

  • Do not forget your core audience that built your brand
  • Weigh the balance between short term and long-term PR goals for CSR
  • Your true fans and your core consumer base are the audiences who built your business. Some companies decide to pivot as their business needs change over time. That is okay, as long as you are okay with potentially losing the initial early adopters.

Is corporate social responsibility a great PR strategy?

“Leaders should create an environment where people are going to be engaged, motivated and inspired and I find that these things will do the opposite. Because if a person doesn’t really align themselves with this, they’re not going to do the things that the company wants them to do. And therefore, productivity and profit are going to get hurt in the long run. And the question is, is CSR PR and CEO activism really worth it?”  – Kingsley Grant

Corporate Social Responsibility can be a great PR strategy if it’s integrated in the right way with your larger integrated marketing communications plan. If you truly believe in what you’re saying and you have thought it through, it can be a home run.   But if you want to do something, for example, to raise environmental awareness, and you’re taking a strong stance, if you really thought that through, and you figured out how you can integrate that in every way, and not just make it a PR stunt and integrate that throughout your entire company, then that is a great move. But if it’s not integrated with your larger business strategy, consumers can sense that and it can feel like a PR stunt for quick earned media attention.

Social media has played a major role in CEO activism

It is better to lose a media opportunity that wasn’t right for your company than to stick your foot in hot water and have no crisis communications PR plan if you have to backpedal.

the social ceo CEO's communications strategy

Executives are getting more attention because of social media than they ever had before. This is a blessing and a curse and must be harnessed properly. This is why it is still important to have PR teams weigh in on corporate social media strategy. Like it or not, these executives are bringing a heightened level of brand awareness to their company. CEOs are the new influencers. They must learn how to manage that influence.

Unfortunately, many CEOs are trigger happy with social media. They now have the ability to post on social media without running anything through the traditional gatekeepers of a PR firm or CMO.  Ten years ago, if a CEO was going to put out a statement, everyone on the communications team would review it ten times before it was distributed. That is simply no longer the case. There’s no real thought or strategy behind some of the things that they post because they’re excited about their new celebrity power so they keep posting.  Overposting on social media will dilute your message over time. I’d rather see a CEO do one great post a week, rather than posting every day.

No, you don’t have to be everywhere and strike while the iron is hot. Wait until it cools off!

 

KEY: trust + consistency + conviction

If you want to stand for something, truly stand for it. But don’t take a stand and then not put out any content on that topic that aligns with your POV four months later. Say whatever you want and take a strong stance, but don’t take a stand because you can get a quick PR hit from it, take a stand because you actually really believe in what you are saying and follow through on that stand.

Taking a stand does not mean writing a LinkedIn post or putting your signature on a document and then doing nothing with it.  That is my biggest issue right now with what CEOs are doing. It just feels hypocritical to me. Four months later, I don’t see anything from them on it. They should all have landing pages on their site. If you’re going to take that stand and go out in the media publicly and get press coverage on it, you really better do something to follow through.

“You will be surprised that what you hear today is only a drop in the bucket. She delivers. I have been watching her in the media and also her posts, I want to encourage you, as you’re listening, that if you hear something that resonates with you today, make sure you check out, Kris, because she has a lot to say about this and will help your company create long term strategies and something that’s sustainable, which is what you really need for your company. So, don’t let this be your time to sit down. Act on it today.

If you want to be involved in corporate social responsibility as a company, you might want to go back and think about what she said. Be consistent. Let that be the thing that people know you for and make sure any CSR PR is not just a one-time thing like some other companies are doing.  Lead with that kind of integrity and that consistency that people can know and can trust you for where people will applaud your conviction. I applaud their stand I applaud what they’re really doing. at least they’re being consistent. That is what my big takeaway is from this episode.

Kris, I want to thank you so very much for taking the time to be with us here on the show and delivering such great value. I love your conviction. You speak with power and a voice that I believe people will have to listen to.  for me, I want to listen to the voice. I thank you for bringing a fresh perspective.” -Kinglsey Grant, podcast host

POLITICS AND CEO ACTIVISM: FINAL THOUGHTS

The traditional hierarchy that existed within the corporate world no longer exists when it comes to politics.

The question as a CEO is: what is your time worth and do you want to spend the time to engage in the backlash that will happen as a result of putting your opinion online

There is room for one opinion and one narrative in this country. If you try at all to veer away from that set narrative you will be attacked and unfortunately, that also means that your business is going to be attacked.

CEOs have to think about: what price is this worth to me for my mental sanity. A CEO is thinking about running a business in addition to a firestorm for putting out an opinion online

You end up apologizing for something that is so far off course from what you ever even meant. That’s not strong brand positioning or messaging when you are forced to make apologies for when you never put out to begin with. We see forced corporate apologies written by PR professionals because they are being told by their handler they have to do this. I’m not sure those people said anything that was so wrong in the first place.

3 key takeaways:

  1. Limit your risk and liability every time you put an opinion out.
  2. Think about what are the ramifications of this. Am I okay with this post being used on the cover of the NY Times?
  3. Most executives don’t realize that reporters are pulling tweets into their stories. When you tweet, it is public so they are pulling those tweets into their reporting.

 

Brand Activism Resources

Most consumers want CEOs to take a political stance

What CEOs Should Know About Speaking Up on Political Issues

The right and wrong way to do CEO activism

Should CEOs be activists?

When should CEOs take a political stand?

The cost of CEO activism

Interview: How CEOs and executives should be using social media

how ceos should use social media

 

 

 

 

 

 

 

 

ABOUT THE AUTHOR

This article was written by Kris Ruby, CEO of Ruby Media Group. Kris Ruby has over a decade of experience in public relations and CEO personal brand management. In addition to consulting CEOs on crisis communications, Ruby is also a political commentator. She has appeared on Fox News over 100 times and on countless other networks discussing the politics of social media and corporate branding.  Most recently, Kris Ruby discussed the issue of Nike’s political marketing strategy with Kaepernick on Fox News and Fox Business. Ruby also provided commentary on Gillette’s political marketing strategy with the “The Best Men Can Be” campaign on Cheddar TV. 

All content on this web site is owned by Ruby Media Group Inc. © Content may not be reproduced in any form without Ruby Media Group’s written consent.  Ruby Media Group Inc. will file a formal DMCA Takedown notice if any copy has been lifted from this web site. 

This article was last updated on February 20, 2020.