CEOs can no longer be silent on socio-economic issues, says senior communicator Anup Sharma

 30th June 2020    Opinion 

The killing of 46-year black citizen George Floyd in the custody of Minneapolis police has brought to light not only the issue of racism but also that of CEO action. The incident which saw protests across the streets of US had many global CEOs coming out and raising concerns on social media or issuing internal statements against the incident.

Traditionally, organisations and their leaders have been known to keep away from controversies, because of  the potential impact of taking stands on their brands and businesses.  But the killing of George Floyd – has made CEOs take a stand and for them speaking up is now a “business imperative “. After hundreds of Microsoft employees sent an email to executives demanding the company to cancel its police contracts, founder Bill Gates took to Twitter to express his views on the issue:

The horrifying killings of George Floyd, Ahmaud Arbery, Breonna Taylor and far too many other Black people—and the protests they sparked—are shining a light on the brutal injustices that Black people experience every day…

— Bill Gates (@BillGates) June 10, 2020

Shareholder value is no longer the sole priority

This is part of a larger trend in the making that has been crystallised due to recent events around #BlackLivesMatter and COVID. In August 19, 2019 around 200 of the top corporations around the US formally prioritized the needs of all stakeholders over the singular need of shareholders, by signing the “Statement on the Purpose of a Corporation” manifesto which was issued by the highly influential Business Roundtable.

In 2017 when the US President Donald Trump failed to condemn white supremacists for the violence, injuries, and murder at the Unite the Right rally, 30 CEOs from large corporations like 3M, Merck, Intel, Blackstone, PepsiCo, Walmart, IBM resigned from or voted to disband two White House advisory panels.

As more and more business leaders choose to speak out on contentious political and social matters, CEOs will increasingly be called on to help shape the debate about such issues. Many will decide to stay out of the fray, but they should still expect to be peppered with questions from employees, the media, and other stakeholders about the hot-button topics of day. Last year at the Public Relations Consultant Association of India (PRCAI) Leadership Series event on ‘Corporate Action and the Rise in Purpose’ the Vice-chair, Asia Pacific of Weber Shandwick, Darren Burns had shared his views on why corporate action should be encouraged. Darren presented global case studies like The Tampon Book and Apple’s supply chain report spotlighting standards throughout the supply chain system in light of suicides by Foxconn’s assembly line workers.

Speak out or fail to be counted by customers 

As per Aaron K. Chatterji, professor of Duke University, and Michael W. Toffel, professor at Harvard Business School, noted authors on CEO Activism – This trend of leaders speaking out on social and environmental policy issues not directly related to their company’s core business can influence not only public opinions about government policies but also consumer attitudes about the CEO’s company.

While there may not be written guideline, always, but organisations do keep a tab on their employees taking a public stand on issues which could cause embarrassment to the organisation and its brand. Discouragement may also come in other forms like being excluded from certain projects, promotions may suffer, appraisals may get affected and so on and so forth.

In 2018 Anand Mahindra, the outspoken Chairman of the Mahindra Group, had said pressure from shareholders for higher returns prevents India Inc from speaking out on social issues and getting embroiled in controversies. But today Anand Mahindra regularly vocies his opinions and tweets about social and economic issues.

We also see organisations who have  come forward and taken a stand. In 2019, online food delivery platform Zomato had a customer who wanted food to be delivered only, by a person from his religious community. When Zomato declined to do this the customer tweeted Zomato to cancel the order. Soon after this incident, Zomato from its official Twitter handle quoted this customer’s tweet and said, “Food doesn’t have a religion. It is a religion.”

Interestingly, Zomato founder Deepinder Goyal had also joined the conversation opinionating that Zomato has no place for such religious discrimination and politely showed the door to customers who want to choose delivery executives based on religion. Now it will be interesting to see how Zomato will react to a group of employees in Kolkata tearing and burnt their official T-shirts to protest Chinese investment in the firm. This protest was coming at the backdrop of the recent killing of 20 Indian soldiers in a clash with Chinese troops in eastern Ladakh’s Galwan Valley.

Anup Sharma is a storyteller and senior communicator. He is also, senior director, PRCAI