Analysis: Take a stance or tiptoe away? Corporate America’s battle with social activism

In this news, we discuss the Analysis: Take a stance or tiptoe away? Corporate America’s battle with social activism.

(Reuters) – Earlier this year, a flood of big American businesses pledged to tackle racial inequality and promote social justice after Minneapolis police killed George Floyd, a black man, sparking protests across the country.

Companies that have rushed to take a stand include names known as Home Depot Inc HD.N, Procter & Gamble Co PG.N and Coca-Cola Co KO.N. Corporate America has pledged billions of dollars to promote diversity in the ranks of employees and the communities in which they operate, including banks like JPMorgan Chase & Co JPM.N, which recently made a $ 30 billion pledge to over the next five years.

Another group of companies, particularly in Silicon Valley, are being more cautious, according to interviews with more than a dozen investors, entrepreneurs, executive coaches and recruiters.

Businesses and employees should avoid taking public positions that fuel controversy in an increasingly polarized America, supporters of the view and their advisers told Reuters. Instead, they should focus on strategic initiatives and achieve financial goals, they said.

Senior management teams and boards are discussing how to handle the issue, sources said, with some remaining silent as a strategy and others laying down formalized ground rules detailing how leaders can discuss issues. sensitive social and political.

“People struggle with employees who expect companies to solve problems that are not within the purview of the company,” said executive coach Stephen Miles of the Miles Group.

Miles has spoken to at least 10 CEOs in recent weeks who have sympathized with Brian Armstrong, the chief executive of Coinbase, whose September 27 blog post on why the cryptocurrency company would remain apolitical sparked the debate on the public place. (Blog:

Coinbase and its employees should pay attention to the company’s “mission” and not delve into broader societal issues that distract and reduce productivity, Armstrong wrote. The company declined to comment further for this story.

After sharing it on Twitter, some founders and former senior executives of large tech companies have responded positively. The point of view can be shared even more widely in American companies than it appears.

“People don’t take a public position on this, but they ask about it in the boardroom, ‘What should we do? Said Kathleen Utecht, Managing Partner of venture capital firm Core Innovation Capital.

Utecht agrees with Armstrong. Her position is more common than people realize, she said, especially in small businesses where management teams don’t want to devote limited resources to solving complex societal issues.

The unprecedented outpouring of corporate support for racial justice recently follows several years of companies taking a stand on other issues activists criticize them on including climate change, the gender pay gap and LGBTQ rights.

Blue-chip companies have not shied away from their announcements and small businesses have taken a stand as well. Expensify CEO David Barrett sent an email to the software company’s 10 million users on Friday urging them to vote for Democratic presidential candidate Joe Biden.

These statements are garnering attention, in part because of their historic unusualness, said Mike Toffel, a professor at Harvard University who has studied CEO activism. It’s more common today than five or ten years ago, but still rare, he said, and the feeling that businesses should get involved in politics is far from universal.

“You can count on a few hands on how many examples you can find,” he says. “A lot of people don’t get involved.”

About half of the companies in the Russell 1000 did not file a racial inequality statement last summer, according to preliminary data from As You Sow, a nonprofit that advocates corporate responsibility.

Of those who made statements, 195 were in hard-to-find places like the LinkedIn page or a CEO’s staff. Facebook page, not the site Company web, said Andrew Behar, managing director of As You Sow.

Lloyd Carney, a former tech executive who sits on the board of directors of companies including artificial intelligence provider Nuance Communications Inc NUAN.O, said “smart” companies were taking action to tackle internal social causes, but not in a striking way. This allows them to avoid negative reactions from employees, customers or politicians, he said.

“It’s one of those things where you better make some quiet noise,” Carney said. “A press release is the worst thing you can do in this highly politicized environment.”

About half a dozen companies outside of Silicon Valley have recently put in “guardrails” to allow executives to discuss sensitive social and political issues, such as Black Lives Matter, an adviser told Reuters. the administration’s advice. Executives should make it clear that they speak in their personal capacity on certain issues and inform boards of directors of their comments, the adviser said.

For example, high-tech maker Sono-Tek Corp SOTK.PK adopted a similar code of conduct in September that prohibits employees from participating in politics at work or with company resources.

This provision is especially important in today’s tumultuous world and is intended to help employees feel comfortable on the job, said company chief financial officer Steve Bagley.

“Big companies want people to buy their product, support their business, whether they’re diehard Democrats or Republicans, or in between,” said Ronn Torossian, public relations manager for 5W, who speaks with CEOs from a wide range of industries. “A week does not go by without major companies discussing it.”

Reporting by Anna Irrera in London and Jessica DiNapoli and Imani Moise in New York; Editing by Lauren Tara LaCapra, Lisa Shumaker and Paritosh Bansal

Original © Thomson Reuters

Originally posted 2020-10-27 11:16:13.

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