The Reasons Why CEOs Speak Out

There are a variety of reasons why CEOs are speaking in on contentious issues. In some cases, executives such as BOA’s Moynihan and Dan Schulman of PayPal have cited their corporate values as justification for their activism, such as when they spoke out against a North Carolina law requiring people to use the restrooms designated for the gender on their birth certificates, which turned into a referendum on transgender rights.
Another school of thought holds that businesses should have a greater purpose than just maximizing shareholder profit, a notion that has gained favor in the business world in recent years. “Today’s CEOs must advocate not just for their shareholders, but also for their workers, their customers, their partners, the community, the environment, schools, and everyone else,” Benioff said in an interview with Time.

And for many leaders, speaking up is a matter of personal belief as well as professional responsibility. In his opposition to the Obamacare mandate that health insurance for workers includes the morning-after pill in addition to all other kinds of birth control, David Green, the founder and CEO of Hobby Lobby, a family-owned network of crafts shops, used his religious views as a justification.

Some business executives have expressed concern that Millennials, whether they are workers or consumers, are becoming more concerned with a stronger sense of company purpose. A recent study by Weber Shandwick and KRC Research discovered that a significant proportion of Millennial consumers feel that CEOs have a duty to speak out on political and social problems, with a significant proportion stating that CEO activism influences their purchase choices.

Leaders may cite a number of different motives at the same time. As Jeff Immelt (former chairman and CEO of General Electric) has said, “I simply think it’s disingenuous not to speak up for those things that you believe in.” As custodians of our businesses, we also serve as representatives of the individuals who collaborate with us. We’re cowards, in my opinion, if we don’t take a stance on issues that are really compatible with our goal and with the values of our people on occasion.”

Reference: Aaron K. Chatterji and Michael W. Toffel -A playbook for polarized political times (Harvard Business Review – January–February 2018)