• Daisy Powell-Chandler

When should companies talk politics?

In the run-up to December’s General Election, I wrote about the risks inherent in manifestos and how you could prepare for life after the election. Campaigns are a flashpoint for corporate-political relations: politicians become more vicious when survival is at stake and the gloves come off because there isn’t the usual restraining factor of a certainty that they will have to work with you again next week. Outside of the election context relations are usually more civilised but that does not mean they are risk-free.

Choose the right issues for your CEO to be active on
Photo by Miguel Henriques on Unsplash

Direct run-ins with the political classes can lead to a revocation of your license to operate, a significant undermining of the investment case for your business, tarnishing of your authority or honesty and/or the propagation of misinformation or one-sided arguments against you. It is no wonder that many CEOs try their darndest not to be quoted about day-to-day politics. So why do some companies or their leaders speak out? And what lessons can the rest of us learn from their example?

Some CEOs are driven to speak out – or at least they justify their decision to do so – by moral obligation. Several corporate leaders in America have taken public positions over police shootings or immigration policy in the past few years, for example. The ban on travel from seven predominantly Muslim countries such as Yemen and Syria was unlikely to substantially impact the ability of Silicon Valley to hire the most promising programmers and yet 175 major tech firms put their names to an amicus brief to the United States Supreme Court to support overturning the ban.

Even if management themselves do not feel there is a strong case for involving the company in controversy, workers will sometimes push them to. Oracle’s employees were so cross that their employer had not supported the tech industry brief against Trump’s travel ban that they started a petition for the company to change its position. Amazon’s employees have deliberately disobeyed company employment rules en masse to protest not only the climate policies of the online giant but also the manner in which it treats dissent. It is worth noting, however, that employees can have too much of a good thing: academics studying Turkish firms discovered that excessive political involvement can also damage employee perceptions of the ‘prestige’ of a company – and reduce willingness to work for a firm.

Clearly there is a careful balance to be maintained and we must also take into account the views of consumers. Though not everyone wants a dose of politics with their cornflakes, there is mounting evidence that customers respect companies that display values and ethics – and the clearest ways to telegraph these are in your customer service, your crisis management and by how you use your voice. Weber Shandwick research found that globally “41% of consumers and 46% of executives think that companies should express an opinion or take action on issues that may be controversial, such as race, gender, immigration or environment.” In this situation, the fact that the subject matter is risky or controversial is intrinsic to the benefit gained: you have taken a risk to make an important point.

Apple's Tim Cook spoke out about politics
Photo by zhang kaiyv on Unsplash

Is taking a stance always risky? That same Weber Shandwick research found that companies routinely under-communicate about their values and ethics – and instead over-communicate to consumers about their financial performance and community activity. In these situations, making clear where your organisation stands can be a win-win option. For example, when Indiana passed its controversial Religious Freedom Restoration Act (RFRA - protecting businesses that withhold services on the grounds of religious beliefs, such as restaurants refusing to serve same-sex couples) several chief executives of large companies spoke out. Apple CEO Tim Cook was one of the most prominent opponents and researchers studying the impact later found that when shown Cook’s op ed on the topic, consumers were both more likely to say they were opposed to RFRA and had an increased intention to buy Apple products compared to consumers who had not read the op ed. Apple’s brand both helped to win the argument and was itself bolstered by having joined the fight.

The most powerful moment at which to harness your organisation’s voice is when there is a clear alignment between an issue and your business. For example Lush, the UK-based handmade cosmetics company, has always made clear its vegetarian, anti-animal cruelty and environmental credentials. Over the years they have chosen to use that same voice, and the credibility built in other campaigns, to make clear the company’s views on tax and on immigration – in this case because they felt that Brexit would have a substantial impact upon their workforce. Each time they have explained clearly why it is necessary for their business to get involved. This approach makes sense: the public looks more kindly on brands that discuss political issues when they are core to the brand identity. Veer away from this tenet and consumers will be less forgiving of your motives for activism, “citing media attention and CEO reputation-building as the top reasons CEOs take public stands.”

If you get this wrong, what are the downsides? For a start, it can become very tricky to have good-faith conversations with a government that you are publicly critical of – especially if you have actively campaigned or taken legal action against them. Once your company is seen as an adversary, elected and non-elected government officials will be less likely to share advance briefings or to listen to your view on industry developments. If there is a crisis in your sector, or major regulatory changes in the pipework, you want to have a place in that conversation.

This kind of adversarial exchange can also lead to long-term brand associations with a particular stance. Chick-fil-A, the American fast food chain, has a reputation that is 17 points higher amongst Republicans than Democrats, due to links to conservative groups that campaign against same-sex marriage. On the opposite side, retailer Target is liked more by Democrats after introducing gender neutral toilets. But the biggest takeaway from this polling by Harris Poll is that while an excess of political activism might have a negative impact on reputation, it will be nothing compared to other own-goals. The companies that garnered the worst reputation scores weren’t the activists but instead had been involved in corruption scandals, or implicated in shady business practices or exploitation, for example: Volkswagon, Halliburton, Monsanto, and Goldman Sachs.

So, when should you talk politics?

  • When the point you are making aligns with your organisational values and ethics.

  • When you can make a difference – the bigger you are the greater responsibility you have to get involved. Trade associations and campaign groups are great options if you are smaller or need the comfort of a larger group.

  • When it matters to the humans involved. Know your audience, map all of your stakeholders and understand who matters to your organisation. If you know them well then you will know when it is important to act and how to frame it when you do speak up.

  • When it sounds authentic. Your audience – consumers, politicians, and the media – will discount what you are saying if it sounds like a ploy for attention, rather than a strongly held view.

Want help to create a plan that protects you from a future political disaster? Realised that you don't know your audience all that well after all? Get in touch in