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5 Things CEOs Must Know About Corporate Activism

By Leon Kaye
Whether you’re taking a stand on topics such as immigration - in business, as in life, you will win friends and enemies. Here are 5 things CEOs have got to be aware of when venturing into activism.

Whether you’re taking a stand on topics such as immigration - in business, as in life, you will win friends and enemies. Here are 5 things CEOs have got to be aware of when venturing into activism.

We have been hearing more and more about brands taking stands and companies plunging into the uncertain waters we call corporate activism. Done right, and your company could strengthen its brand reputation and win the trust of more consumers. Done wrong, and well, a dumpster fire fueled by plenty of social media kindling could mean you’re locked into  emergency meetings in the c-suite conference room for a while. Whether you’re taking a stand on immigration, the federal government shutdown roller coaster or transgender rights – just to name a few volatile topics - in business, as in life, you will win friends and enemies.

According to joint study that the public relations firm Weber Shandwick and public opinion research consultancy KRC Research recently completed, there is opportunity in CEO activism to “drive and differentiate corporate reputation.” The caveats, however, are that such a journey is launched after risks are identified and companies may want to ensure that such speaking up and stepping out is done if the topic at hand is linked to the company’s core business.

The bottom line is that business leaders may want to review the following five reminders before jumping on the brands taking stands train.

CEO activism can gain support, but won’t always be seen as favorable

It shouldn’t be a surprise that venturing into social or political activism could polarize your company’s consumers. This survey’s findings read a lot like the latest political poll. For example, 38 percent agree that CEOs have the responsibility to speak out on hotly contested topics. 43 percent believe the opposite, which means there are still the one-fifth who are “undecided,” but could be convinced to side with taking a stand.

And taking a stand could at a minimum engender respect for that CEO: when respondents were asked their opinions about CEOs who took public positions on hot-button social or political issues, the “yeas” were nine points ahead of the “nays.” Woe be unto the CEO who takes a stand on a position that doesn’t have a clear link to his or her company’s business, however; when asked about this hypothetical, the “nays” to corporate activism come out 12 points ahead of the “yeas.”

Activism, if done right, can influence purchase intent

Could taking a stand lead to a boost in sales? It’s a slippery slope; do a quick search of “corporate activism” on Twitter and you’ll see plenty of jaded assessments of how some of the social media glitterati view the brands taking stands movement.

On the other hand, the authors of this report point out examples where taking a stand can pay dividends for companies – especially in this era where consumers distrust many institutions, including, of course, government. They point out to research suggesting Tim Cook’s public statements against “religious freedom” laws may have pushed consumers who are pro same-sex marriage closer to Apple products.

But the sword cuts both ways. Starbucks has faced plenty of challenges (i.e., boycotts) from taking controversial stands, such as with its ill-fated “race together” campaign a few years ago. Target also garnered its share of grief for its transgender bathroom policy. Both Starbucks and Target, however, have a history of clawing back as soon as the financial press reports on yet another period of demise. As TriplePundit’s Tina Casey frequently reports, the success of boycotts is a mixed bag.

Your company’s loyalty will be tested

See above. Starbucks will be in for a ride depending how Howard Schultz’s nascent presidential campaign fares. The report’s authors suggest CEOs should tap into the pulse of a company’s workforce before going out on a limb with an adventure in activism.

Why? The numbers suggest plenty of ambivalence. More than one-fifth of those surveyed for this report said they “don’t know” how they’d feel if their CEO waded into the world of activism – but that number could change quickly once this question no longer was a hypothetical. One-third said it would not make a difference. But by a 26 to 19 percent ratio, more employees said they would feel more loyal as opposed to becoming less supportive.

Many Americans are still leery about the motivations behind CEO activism

Here is where CEOs really need to consider whether this venture into activism is worth the potential blowback. Any CEO who fancies himself or herself of the next Marc Benioff or Larry Fink must remember that this report suggests the U.S. public is, at a minimum, guarded about taking a stand. When asked the reasons why a CEO would take a position on any hotly contested issue, 36 percent said it was a ploy to get media attention. Building the CEO’s reputation and selling more goods and services also ranked high on this list.

And what assessments tied with those next two reasons given? Respondents then said to be “open and honest” about alignment with company values, as well as their personal feelings, both scored mentions.

The lesson here? To start, authenticity matters.

There’s a good chance you’ll win over the millennials

In what should be no surprise, millennials appear to have the most open mind toward corporate activism, at least according to this report. And when it comes to the workplace, millennials are most enthusiastic about this idea – much more so than the Gen X’ers and even more so than the baby boomers. And whether millennials agree with a CEO or not on a social issue, that business leader has at least earned this generation’s respect. “Perhaps Millennials, who grew up with and are intrinsically connected to social media, are used to wearing their opinions on their sleeves (or online) and are more comfortable with leaders who do the same,” concluded this report’s authors.

We talk about these trends weekly in the Brands Taking Stands newsletter. Be sure to subscribe!

Image credit: David Geitgey Sierralupe/Flickr

Leon Kaye headshot

Leon Kaye has written for 3p since 2010 and become executive editor in 2018. His previous work includes writing for the Guardian as well as other online and print publications. In addition, he's worked in sales executive roles within technology and financial research companies, as well as for a public relations firm, for which he consulted with one of the globe’s leading sustainability initiatives. Currently living in Central California, he’s traveled to 70-plus countries and has lived and worked in South Korea, the United Arab Emirates and Uruguay.

Leon’s an alum of Fresno State, the University of Maryland, Baltimore County and the University of Southern California's Marshall Business School. He enjoys traveling abroad as well as exploring California’s Central Coast and the Sierra Nevadas.

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