What Do People Really Think About CEO Activism?
Welcome to my weekly Q&A roundup. (Scroll down to find the Q&A.)
If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions—tough questions, brave questions, you name it. The level of candor and curiosity always inspires me, and I want to share that sentiment with you. So each week, I pick one question that I believe others would find most instructive and publish my response to it here.
The purpose of this weekly tradition is transparency and inclusivity.
Transparency: a behind-the-scenes look at my day-to-day.
Inclusivity: bringing others along in the journey.
Are CEOs Overstepping Their Boundaries When They Speak Out About Social Issues?
Why are CEOs overstepping their boundaries to talk about politics and social issues?
Your question implies that CEOs are not supposed to speak out on social or political issues. Hence, when they do talk about these issues, they overstep their boundaries. A decade ago, we could meaningfully discuss your question in the context you asked it.
However, times have changed. Boundaries have been redrawn. And in many cases, CEOs that speak out about issues unrelated to their core businesses are doing so because that’s what their stakeholders expect them to do.
Americans Want CEOs To Speak Out On Social Issues
64% of Americans believe CEOs should hold themselves accountable to the public and not just to the board of directors or stockholders
63% of Americans believe CEOs should step in when the government does not fix societal problems
61% of Americans believe CEOs should take the lead on change rather than waiting for government to impose change on them
To be sure, the rising tide of CEO activism didn’t start with the pandemic. It had been swelling slowly over the past decade. Maybe you remember when Tim Cook, in 2014, defended Apple’s investment in renewable energy with this stern ultimatum:
“If you want me to do things only for ROI reasons, you should get out of this stock.”
Or perhaps you remember when, in 2015, Howard Schultz, then CEO of Starbucks, asked his baristas to write ‘Race Together’ on Starbucks cups to spark conversations on racial justice. (A well-intended gesture that was not well-received by the public—but that’s beside the point.)
The Michael Jordan Dictum
What makes these two examples of CEO activism so noteworthy is that they broke with the previous norm of CEO silence. Prior to the rise of CEO activism, many corporate leaders abided by the Michael Jordan dictum. As the alleged history goes, Michael Jordan refrained from commenting on political matters because “Republicans buy sneakers, too.”
It’s important to point out that Jordan no longer follows the Michael Jordan dictum. He broke his silence in the wake of the shootings of Black Americans in 2016:
“I have decided to speak out in the hope that we can come together as Americans, and through peaceful dialogue and education, achieve constructive change.”
Since then, more leaders have, like Jordan, been breaking their silence to speak out on these and related issues.
The Role Of The CEO Is Changing
The responsibilities of the modern-day CEO are changing.
Today, a company’s ethics are three times more important than its competence when it comes to establishing trust with consumers. And whose job is it to build that trust? Nearly seven in ten people say the responsibility to build trust falls on the CEO.
In fact, building trust should be the CEO’s #1 priority according to Edelman’s The Battle for Truth report.
Again, this isn’t a pandemic alteration. However, the pandemic exposed many of society’s inequities and these inequities fuel CEO activism. Another trend fueling CEO activism is generational.
More than half (56%) of Millennials believe CEOs have a greater responsibility to speak out on social issues than they used to, compared to 36% of Gen Xers and 35% of Baby Boomers. Millennials are also more likely than Gen Xers and Baby Boomers to agree that CEOs should meet with government officials to share their opinions on societal issues.
How To Speak Up Like A CEO
Just because CEOs are expected to speak up on social issues doesn’t give them a blank slate to say whatever they want wherever they want. Authenticity and trust are key to the success of CEO activism.
Authenticity: leaders should horizontally integrate the issues they talk about into their line of business. How does issue X impact the company, its consumers, and its employees?
Trust: the best way to earn trust is by following through on commitments to a better, cleaner, and more equitable world. Don’t lose trust with empty promises.
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© 2021 Katica Roy™, Inc.