The Financial Times headline today blares, “Vladimir Putin to meet Italian CEOs about ‘expanding ties’ amid Ukraine tensions.” The Italian corporate lions, from Pirelli to Generali and UniCredit, are to have a video meeting with the Russian President just as the U.S. and Europe are considering the imposition of sanctions on Russia if it proceeds with an invasion of the Ukraine. At the same time, I received a note from the Gun Safety Alliance (Edelman does pro-bono work for this group), saying that the public perceives that “corporations have a significant role in curbing the epidemic of firearms violence.” According to a recent survey of 1,000 US adults, 85 percent say that business has a corporate responsibility to make their communities safer and 73 percent say that it is either very or somewhat appropriate for a company to advance policies to prevent firearm death and injury. Is business on the verge of over-reaching?
The 2022 Edelman Trust Barometer clearly identifies business as the most competent institution, far beyond government (53 points difference). On five key issues, from sustainability to race/inclusion to re-skilling to pandemic to wage levels, respondents told us by a 5 to 1 margin that they wanted more business involvement. And 80 percent said that they want CEOs to lead the change, to be the voice for stability and tangible action.
On a call today with The Wall Street Journal CEO Council, the most pressing question was how far to go with business leadership on societal issues. I told the group that trust had become local, in ‘my employer’ and ‘my CEO.’ That this made it incumbent on the company to become a frequent communicator of high-quality information through its own channels. That business was on firm ground when the issues addressed are directly linked to their operations. That in the next year, business had to grab the high ground on re-skilling before the inevitable layoffs related to implementation of technology in manufacturing and services (retailing, banking).
Now to the complex problems. Business is caught between sovereign powers on issues of national security, human rights, and intellectual property protection. The best example is the allegation of forced labor in Xinjiang Province in China. If a company wants to maintain its sales presence in China while managing the outcry by consumers and employees in the West, it opts to discontinue manufacturing and sourcing from that troubled area. But there is another choice, an overt statement of opposition to the Chinese policy in the province, as done by the CEO of fashion brand H&M, leading the Chinese to take the product off e-ecommerce sites in the country. And the decision by Italian CEOs to continue with their session with President Putin puts them squarely in the camp of politics, not policy.
Contrast this to the approach of the Gun Safety Alliance. Carolyn Everson who runs GSA told me today, “We are trying to find a way for companies to get involved in this issue. We do not want to take the guns away from their owners. We want to find a way to have guns as safely as possible, with safe storage and proper training for those who may face a dangerous situation in the workplace. This is not a politicized conversation.” The key to the conversation is the employees, who need to look at gun safety in the same way as they do sustainability goals, a litmus test of values and on fit at the company.
I also want companies to take a role in fixing the problems of their headquarters cities, whether personal safety, race relations or education. I commend Rockwell for its adoption of a technical high school in Milwaukee, which has only a 50 percent graduation rate for males from its public schools. I spoke today with Discover, the digital consumer bank that opened a customer service center on the South Side of Chicago. Leslie Sutton, the head of communications, told me that the planned hiring of nearly 1,000 people, already underway, is already starting to have a positive impact on the community. “But the biggest impact is on our own team. It has changed the way we work: how we identify, select and partner with suppliers; the way we recruit talent and eliminate barriers in the process; and how we approach partnerships with nonprofits that are so critical to the community. It has changed our approach overall.” The new center is already performing at an industry-leading call level.
CEOs need to stop conflating purpose campaigns with corporate strategy that addresses very real societal problems. It is a sign of strength, not weakness, to put business into a position to fix problems while creating opportunities for profit. We have to sell capitalism to the skeptical public on the basis of tangible progress.
Richard Edelman is CEO.
