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How Involved Should CEOs Be in Social Causes?

May 20, 2015
Borderless Leadership

What is the difference between a CEO using the corporate “bully pulpit” to express her or his values, and just being a bully in forcibly imposing those values on others, specifically by threatening or imposing economic sanctions? What are the red lines between passionate protest by prominent individuals, responsible commentary by corporate representatives, and the use of economic power to impose one’s values on others?

The anti-RFRA dust has settled after the outcry (justified, in my personal view) of public and private sector leaders in response to the thinly veiled expression of anti-LGBT religious values in Indiana. But more broadly, the actions of some of the world’s most high-profile CEOs, in this instance and in other contexts, raise complex and persistent questions about corporate involvement in social causes. I raise a few of them below. I don’t think the answers are simple, and integrity doesn’t have just one face. But I do think explicitly raising these questions is essential in trying to clarify the appropriate roles and responsibilities of corporate leadership in a complex, volatile, and ever-more transparent and politically charged world. (Personal disclosure: I am pro-diversity, pro-choice, and pro-science.)

Is consistency of social values an important corporate objective? If you think so, consider the following headlines:

“Apple Cleared to Operate and Market Products in Saudi Arabia.” Tim Cook, in a historic visit to the Gulf last year, is quoted as saying, “We would like to bring our passion to the UAE [and] Saudi Arabia, and Africa.” Homosexuality is illegal in Saudi Arabia. It is also illegal for women there to drive their cars to Apple stores. Homosexuality is also illegal in Nigeria and Uganda, which also happen to be strategic targets for Apple. A CEO using the corporate bully pulpit to call Indiana to task for its regressive policy (again, appropriately in my opinion) yet who hails Apple’s opportunities in markets with much more reprehensible laws, has to ask himself some tough questions as to consistency, as to the capacity in which he is acting (individual citizen or corporate leader) and as to what specific principles are guiding him.

“EMC May Shift … Focus to Malaysia and Indonesia Next Year.” Malaysia is the most blatantly anti-Semitic of all Asian countries, and one of the most anti-Semitic nations in the world. Former Prime Minister Dr. Mahathir Mohamad, who remains an influential figure in the country, is infamous for his public tirades against the evils Jews bring upon society, blaming them for the Asian financial crisis, among other ills, and publicly urging his Islamic-country heads to fight the Jews. Does this figure into the strategic decision-making of EMC’s Joe Tucci in the same way that RFRA does? Is it okay that the choice of social priorities seems to be one of pure personal preference?

What strategic principles should guide the prioritization of social causes? Once a corporate CEO decides to allocate resources, including her time, to social causes, how should that time be allocated? This is not a personal question, but a paramount issue for the company, as the CEO’s time is one of the company’s most valuable resources. Thus, it is a central question of corporate strategy: What are the strategic guidelines for allocating resources to social causes? Who sets those guidelines? In a democracy, the process for deciding on social policy is clear and explicit because prioritizing social values is the explicit mandate of government. But in a company?  One might say (with some cynicism), “These CEOs are just making business decisions,” but that begs the question. Apple’s (apparently legal) avoidance of billions of dollars of US taxes is beneficial to Apple’s shareholders, not to the United States. The EU’s competition authority is currently investigating Starbucks’s use of domiciling to avoid taxes in the UK. Why is RFRA within the bounds of corporate strategy, and tax avoidance not?

Should support for non-business (social) values be expressed by corporate officers, or by individual persons? I realize that with the common acceptance of “shared value” and “corporate social responsibility” even raising this question is near-heresy. Yet many of us who are disturbed by the disproportionate impact on election campaigns of the largely unrestricted Super PACS, are perturbed precisely because large corporations have economic firepower orders of magnitude greater than the individual citizen. Should CEOs Benioff, Cook, and Tucci be acting as Salesforce, Apple, and EMC with the disproportionate right (and responsibility) to allocate people and resources, or as individual Citizen Benioff, Cook, and Tucci, with the same rights as you or me?

What kind of diversity does a values-based stand by a CEO, on behalf of her or his company, represent? What if there are employees who have values or viewpoints that are different from the CEO’s? Are they less “EMC” or less “Apple?” In his eloquent, even iconic, Op-Ed, Tim Cook writes that Apple is open to all. Do employees who disagree with Cook really feel as comfortable expressing their social values as Cook assumes? We are increasingly accepting of the belief that diversity of opinions, styles, backgrounds, and beliefs can, combined with effective leadership, propel any collective action to greater excellence and achievement. What kind of pro-diversity environment are we creating if we, with the best intentions, make it difficult for employees who believe, honestly in their hearts, that single sex marriage is against their values? Not simple.

Is economic force, even boycotting, a legitimate means of a corporate CEO exercising social values? Boycotting a region or state is an act of power, not one of reason or dialog. Boycotts are – legitimately, some would argue – engaged in when dialog and reason fail, because in part, a boycott is intrinsically a form of collective punishment. (Not coincidentally, collective punishment is mentioned in Article 33 in the Geneva Convention.) How should we consider the threat of imposing harmful economic sanctions by the NCAA,, Yelp, EMC and others on the people of Indiana, including those who fought against RFRA? The strategy of collective punishment is designed to foment internal dissent, to turn a populace against itself, to create, in the extreme, self-hatred. Boycotting is when the powerful person leaves the bully pulpit and becomes a bully. I admire Tim Cook for (as far as I can tell) respecting this distinction. Many of his corporate peers crossed this line by threatening to punish the 6.5 million population of an entire state by withdrawing conferences from Indiana, forbidding travel to the state, or helping employees relocate.

Is economic force, or boycotting, an effective or preferred tool for social change? Tim Cook, again with great eloquence, invoked the fight against segregation in his Op-Ed. Cook might also make clear to his counterparts that the accomplishments of Greensboro, North Carolina, and Selma and Montgomery, Alabama, were not the results of people relocating from their homes or trying to inflict economic harm on them. To the contrary, these brave people went into the front seats of the buses and the schools and the lunch counters. Boycotting – by residents, not by outsiders – was only exercised as a last resort in Montgomery’s anti-segration battle. Will CEO Marc Benioff be more effective in turning a cold shoulder to Indiana, or will Citizen Marc Benioff be more effective in changing Indiana’s social values and laws by going to Indiana to persuade, demonstrate and (if needed) shame RFRA proponents (some of them, at least) to change their positions?

I don’t have easy answers to these questions. My point is that probing questions such as these should be in the front of our minds – and in particular, in the minds of our corporate leaders, their boards, and the public – as we strive to create successful and sustainable enterprises, and to make the world a better place.

By Daniel Isenberg

Source: Harvard Business Review

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