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: 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?
- Millennial consumers. Consumers under 30 demand corporate social responsibility from their leaders.
- 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 on 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 who 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 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 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 brands 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.
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
What makes an Instagram account valuable?
