I was quoted earlier this week in a Wall Street Journal editorial advising CEOs in Davos who attended the launch of our mid-year Edelman Trust Barometer, “We better be careful here because there’s starting to be a pushback against wokeness. CEOs can take political stands in their personal capacity and donate to politicians, but their public positions are best focused on policy issues that affect their business.” I want to expand on this subject.
The most recent trust data explains why business is being pushed to take public stands on societal issues. Business is viewed as 50 points more competent than government and people are counting on business to act. There is a desire for business to do more on climate change, economic inequality, workforce reskilling and even trustworthy information by a five-to-one margin. Geopolitics has been added to the agenda for business with 59 percent supporting corporate action against countries that violate human rights or invade another nation. An overwhelming 85 percent understandably want business to take responsibility for economic outcomes (drive innovation, create jobs), while 79 percent say business has societal obligations (address discrimination, advance sustainability). Trust is local as evidenced by our research showing trust in ‘my employer’ is at 77 percent, my employer media (65 percent) and my CEO (66 percent). This places higher expectations on companies to speak out at moments of significant events impacting the country such as in the wake of the murder of George Floyd or the mass shootings in Buffalo and Uvalde. CEOs are expected to shape and inform policy debates on issues like jobs and the economy (76 percent) but not politics, such as by influencing who the next leader of a country should be (40 percent). And CEOs are sought to be the face of change, with 81 percent of respondents saying that CEOs must be personally visible on work their company has done to benefit society.
The CEO influence starts in the workplace, with equality, inclusion, recognition of the rights of diverse populations and protection of employees (from constant displays of racially-motivated attacks to anti-LGBTQ+ legislation, CEOs must ensure the safety and wellbeing of their organization), fair pay levels, reskilling, and the health of the workforce. The global supply chain is a central core concern, from proper treatment of workers to IP protection to trade policies to sustainable practices in sourcing. Business also can be an invaluable proponent of change through its brands, inspiring us to be more tolerant or to change our behavior. Business also has the responsibility to improve the communities where corporate headquarters are based. That means helping the local school system (adopt a charter school or improve the community college), to advocate for safe streets and an equitable health care system.
There are also issues like gun safety, abortion and voting laws, which have typically fallen in the hands of government, but as a CEO, you may be moved to take a stand on these issues by your employees or because you are headquartered in a state which is considering legislation that would affect your employees. As a business leader, you need to come to a decision about what is true to the mores of your company.
When considering whether and how to engage on these types of issues, it is important to have a pre-established set of values which can be a North Star and a basis for understanding decisions. It is wise to take an inside out approach by consulting with your own team in public sessions. Employees are priority #1 – listen, learn and engage with your teams. Give your employees the talk track for customers and explain the process behind the policy. I have used this approach at Edelman in the past year. I signed onto a letter to the U.S. Senate this week that asked legislators to take immediate action to reduce gun violence because it is a public health issue. I have told my team that our company will cover the travel costs for any employee who needs to go to another state for medical treatment if the Supreme Court overturns Roe v. Wade. I signed onto a CEO letter asking for federal voting rights standards that would supersede state legislation. I took action on these issues because they directly impact our employees and it’s what’s right.
CEOs need to navigate the complexity of the impact societal and political issues have on their employees, their customers, and their business. This is leadership. Business is not elected. The better part of valor for CEOs is to resist the siren song of being first mover and instead act based on your organization’s values. Lead first with your employees. There’s a right way for handling difficult public issues, and the costs are high.
In a virtual meeting with 100 Fortune Connect Fellows yesterday, J&J Executive Chairman Alex Gorsky pushed attendees to understand and embrace the important role business has in society: “I truly believe one of our greatest hopes, and what we are seeing more and more is, how does business engage in the appropriate way so that we can actually have more successful, more inclusive outcomes that help us navigate through some of these very issues.”
Richard Edelman is CEO.