We unfortunately live in an extremely polarized world. Everything is political, including a global pandemic, racial justice, climate change, immigration, free and open elections, gun control, and the list goes on. Politics now appears more important than truth, or even what is just.
And there is little evidence it’s going to subside any time soon. In a recent study by the USC Annenberg Center for Public Relations (Annenberg, 2021), 84% of the general public said they believed polarization will stay the same or increase. Only 28% said their willingness to listen to different points of view would increase, and a meager 18% said their empathy toward people who disagree with me would increase.
Against this backdrop, there is increasing pressure for companies and CEOs to take public stands on high-profile political and social issues (if there is a difference), which carry with it some expectation of reputation and brand lift. However, to do so without understanding the political landscape, the changing expectation of stakeholders, and the need for a disciplined approach to engagement can be a risky reputational proposition.
Wanning Pressure for Companies to Engage
There is an overwhelming body of research that suggests a majority of customers, employees (current and perspective), and the general public believe companies and brands should speak out publicly on controversial political issues they care about and that directly links corporate activism to positive consumer purchasing behavior.
Historically, reputation data from RepTrak has confirmed that companies with outspoken CEOs across social justice, environmental, and political issues achieve higher average reputation scores, until recently. A Q1 proprietary study from RepTrak (2021) seems to indicate the reputational reward companies were getting by engaging in social and political issues may be wanning.
So, in this environment, should a company and its CEO take a stand on a political or social issue?
A Framework for Taking a Stand
Dartmouth Professor Paul A. Argenti (2020) writes that companies and CEOs should ask themselves three critical questions before engaging on an issue:
Does the issue align with the corporate strategy, mission, and values?
Can the company meaningfully influence the issue? Does it have the expertise and resources to make a difference? Is the company willing to put its money where its mouth is?
Will the company’s constituents (employees, customers, community, investors) agree with the company or CEO speaking out?
Some additional questions and cautions must be considered. Most importantly, the CEO needs to ensure the company’s house is in order on the issue it decides to engage on. For example, if the decision is to engage on race, the company’s workplace better be ethnically diverse, particularly at the senior management and board level if the company wants to be considered a credible voice
Other considerations include: Are there likely allies or will the company need to go it alone? How influential, organized, and funded are the adversaries? What’s the potential financial impact on the company? How significantly will the position the company takes impact the short- and long-reputation of the company or the brand? How high is the risk of not engaging? What’s the level of potential backlash and from whom?
Making the decision to engage on social or political issues is not something that can be done lightly nor is it the right thing to do for every CEO and company, particularly given the current hyper-polarized environment. There are serious trade-offs. And the jury appears to be out on the reputational benefits a company or CEO can really derive.
But always remember, no good deed goes unpunished.
USC Annenberg Center for Public Relations (2021, April). Politics, Polarization & Purpose.
The RepTrak Company (June, 2021). Pivot Point: When Speaking Up Might Not Lead to Moving Up. RepTrak Perspectives.
Argenti, Paul A. (2020, October 15). When Should Companies Speak Up About a Social Issue? Harvard Business Review