Consumers and employees now expect companies to engage on social, environmental, and economic issues that are part of the political discourse (think immigration, climate change, and trade). Given how politically polarized the world has become, that can put business leaders in a bind.
Here’s the dilemma as it’s usually understood: They can take a political stand and risk upsetting some consumers or employees, igniting oppositional behavior such as boycotts and strikes, and damaging the company’s reputation. Or they can remain silent, ceding the moral high ground and allowing others to write the narrative.
One company that found itself caught in this dilemma is Delta Air Lines. After a deadly shooting at a high school in Parkland, Florida, the company reexamined a discount it had offered to members of the National Rifle Association (NRA). Delta’s solution was, in a sense, to employ both extremes; it ended the discount in question but announced the action as a reflection of its “neutral status.” In the end, Delta got little reputational benefit for claiming neutrality, and NRA-friendly lawmakers pulled $50 million in tax benefits as retribution.
Framing the debate over corporate political activism in terms of this binary choice — take a stand or remain silent — ignores the reality that companies often seek less-extreme options and have different motivations for becoming active politically. In short, they need a more nuanced set of alternatives.
Figuring Out How to Engage
How might a company identify its alternatives? Our respective research on ethical leadership and corporate political activism suggests that when leaders decide how to engage politically, they need to consider the degree to which the issue is materially important to the company’s financial performance and how relevant it is to stated corporate values.
Customers, employees, and other stakeholders recognize that companies, as for-profit entities, are motivated in part by the bottom line. If a political issue could materially affect it, people will generally view the issue as appropriate for the company to address in some way. For example, they would expect a pharmaceutical company to speak out against health care legislation that could harm the business.
Many companies declare commitments to issues such as diversity or poverty alleviation in their values or mission statements. When they do so, stakeholders naturally expect them to honor those commitments.