Over the past decade, many companies have waded into tricky sociopolitical waters. As researchers at the University of Virginia and McKinsey & Company write for Harvard Business Review, political statements by CEOs and other forms of corporate activism can bring significant consequences.
In a survey, business leaders in North America and Europe said different groups push them to take stands on divisive issues. Voices within the company are sources of that pressure, including employees, corporate social responsibility and diversity, equity, and inclusion teams, and the leader’s peers.
External stakeholders also expect CEOs and other business leaders to take stands. They include consumers, investors, government regulators and consultants. External influencers also exert that pressure, including the media, celebrities, experts, social media influencers, activists, friends and family, and company analysts.
Personal beliefs sometimes motivate CEOs to make public comments on divisive social and political issues. The researchers said it’s a blind spot when company leaders believe their personal beliefs should determine business decisions. A CEO’s personal views may conflict with the beliefs of company shareholders, to whom those leaders have a fiduciary responsibility.
Another blind spot, the researchers said, is when business leaders are overly influenced by groups of their own employees.
“We remind senior leaders that employees’ views rarely represent the breadth of a company’s stakeholders and can diverge sharply with the views of consumers and investors,” the researchers wrote.
Business leaders often don’t understand the range of their consumers’ views. Companies sometimes acquiesce to a vocal minority that doesn’t represent their entire consumer base, alienating the majority in the process.
For further reading on PRsay: The Return to the Statement Era: Knowing When to Speak Out
Illustration credit: Taslima
