In 2020, the idea of a politically neutral company is almost obsolete. Despite the efforts of some large companies to remain independent of the tides of politics, it has become impossible with the penetration of social media and the expectations of consumers that companies disclose their values and beliefs.
The personification of companies, started so that businesses could be afforded certain legal protections, has now led to the expectation that companies will also behave like people – they should hold a position, state what direction their moral compass points and speak out on issues that concern the companies values. The prevailing view among marketers and public relations experts is that anything short of a neutral position on a political issue will alienate customers and thereby put relationships with up to half of its customers in jeopardy.
In the US, consumers hold companies to a high standard in terms of political accountability. If a company supports the NRA, but then speaks out against a mass shooting by providing relief for victims or support for change, they face the backlash of a large and powerful lobby organisation that could see the company face internal struggles. This makes choosing a political stand in the US very complex for companies.
Corporate responsibility initiatives, such as feeding the hungry, which everyone can agree on, are seen as legitimate and essential services. However, as people are increasingly divided over why such crises occur and whose responsibility it is to prevent or provide in such events. This often anger-fueled discourse is played out largely on social media, not only in the US, but in many nations. It seems that everyone has an opinion on every subject and everyone wants to be heard, no matter their level of understanding of the subject.
For PR personnel and marketers, the key to a great CSR campaign is understanding the psychology that shapes responses to corporate political activities. When a company makes a statement on a political issue, the responses of stakeholders can be mixed, but when you search the data the same responses arise no matter what the subject. Here is what stakeholders look for.
As political involvement is difficult to avoid, companies need to be honest about the position of the company, especially if the CEO is prone to making decisions based on their own leanings. If a CEO makes a public statement regarding a controversial issue, it is a reflection on the company. However, if stakeholders are already aware of this view, they are more likely to accept it and focus on other key aspects of the business.
In 2016, BuzzFeed founder and CEO Jonah Peretti broke off an advertising deal with the Republican National Committee (RNC) worth US$1.3 million because of his feelings about then-presumptive US presidential nominee Donald Trump. In a memo to employees, Peretti wrote, “The Trump campaign is directly opposed to the freedoms of our employees in the United States and around the world and in some cases, such as his proposed ban on international travel for Muslims, would make it impossible for our employees to do their jobs.” This stand, while costing the company money, gave the brand a new reputation instantly as a champion for freedom of speech.
Stakeholders prefer companies that are predictable. If your business chooses a cause, you need to stick with it. If you choose to be vocal about a cause, you need to continue to voice concerns. Companies that choose to speak about environmental protections are under huge pressure to ensure that they discuss, almost daily, any new findings, legislation, action or headlines that grab the attention of a vocal and passionate support base. While consumers are often fickle about products, they are not so easily turned when their cause is up for debate, and any company that goes quiet or drops away from a cause needs to also share its reason or risk stakeholders turning away.
Some executives worry that speaking out on political issues that are linked to performance will be perceived as rapacious. However, research shows that consumers expect companies to be driven in part by profits. Rent-seeking is not only tolerated, but admired, so long as a company is transparent, consistent, and shows leadership in its industry. While consumers might not agree with your stand, people appreciate the need to generate profits so that your business can serve their needs. Many businesses have taken this stand during the Brexit negotiations, and stakeholders agree that compromises must be made to have companies stay in business.
Stakeholders like to purchase from, work for, and invest in companies that have a social and environmental impact. Political stands can become a point of differentiation for a company. Patagonia took a stand for environmental causes many years ago and is still vocal every time the Trump administration in the US repeals another environmental law while citizens are focused on his public persona and nonsensical social media outbursts. It is the consistent and rational voice of Patagonia executives, and many other activists and companies, who have taken on this cause that helps to keep media attention on the real issues. It is this type of leadership that stakeholders respect, even if they do not agree with the cause.
Millennials (people 18–35 years old) are more open to CEO activism. They are more likely to be aware of industry or business leaders taking public positions on controversial issues and they are more likely to align themselves with brands that take a position that they also share. That said, it is important that companies research what topics and issues are of greatest concern to the generational market that they most want to appeal to. While for Millenials top concerns might be workers rights and environmental activism, Gen Z might be more focused on gender issues. Issues that are of top priority shift, so having an active role in the cause your company chooses means understanding how current the debate is and what people want to see change.
CEO activism and the politicization of businesses is considered the ‘norm’. To reap the benefits and mitigate risks, companies have to understand the attitudes of internal and external stakeholders when it comes to controversial issues. Leaders must articulate their motivations and commitments to the issues they’re speaking up about. They must clarify how they relate to the company’s values and business, and how the company is going to support the causes they say they care about. Having a solid PR strategy is vital to the success of any public declaration and a well-researched and sensitive approach to issues is also important.
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