CEO activism: when is doing the right thing, the right thing to do?

Today, it is not uncommon for chief executive officers to make their positions on societal issues known.

The effect of this is important since the reputations of CEOs and their companies are so closely connected.

There is certainly no shortage of examples of CEOs speaking out (advocacy) or taking action (activism). And there is growing evidence that the general public believe that it is the right thing for the CEO (and their company) to do.

In fact, the 2023 Edelman Trust Barometer findings highlight that business, for the first time, is seen as more ethical and competent than government, media and even NGOs.

So, there is currently a popular ‘vote’ for companies to lead in society.

The public majority (63%) and employees (69%) expect businesses to align with their values and drive positive societal impact on issues such as climate change and economic inequality.

This also aligns with those who have observed that, as “As brands seek to ‘personalize’ their relationships with consumers, is adopting a political orientation part of closing the deal?”.

Questions to consider

Of course, the opportunity to lead on societal matters is rather more complicated.

Questions arise: “which issues to act on? Do we act or simply speak out? How will any action align with the rest of our corporate priorities?” asks Dr. Marco Henry V. Neumueller, Partner at Odgers Berndtson Germany.  

Are we in danger of ‘greenwashing’ or the emerging danger of ‘value washing’ - when a person or organization uses a political or cultural movement for their promotional activities, but doesn’t act on or systemically support the ethos of the movement.

CEOs, companies and brands who rushed to respond to the Black Lives Matter protests were quickly challenged to disclose the numbers of employed black people at the executive level.

As Edelman emphasize: ‘Great expectations result in heightened risk for business’, and ‘while people want business to do more on social issues, it risks being politicized when engaging on contentious issues.’

“The CEO walks a tight rope: expected to speak out for social good or against social evil, but conscious that doing the ‘wrong thing’ when aiming for the ‘right thing’”, says Michael Proft, Partner at Odgers Berndtson Germany.

There are perhaps some guiding principles to consider:

1 Think before you act: If a CEOs’ actions turn into political activism, stakeholders are likely to evaluate the company’s core values more deeply. CEOs should thoughtfully consider the “issue fit” between a company's image, positioning and target market and the issue's image and its impacted stakeholders.

2 Never underestimate the issue you are raising:  Some issues are simply more decisive than others. On an issue like equal pay at work, there is no longer any argument about the rightness of the issue. But on what are called ‘positional issues’, it is the opposite situation, and the issue is the subject of controversial discussion. For example, immigration, defending free speech for all or boycotts. CEOs should be aware that if you underestimate the issue, you might not only violate stakeholder expectations, but you may also provide a competitor with an open door to improve their market position. In a world of near-instant communication, an unwise tweet in the morning can result in a competitor turning it into their weapon in the afternoon.

3 Is it your turn to speak? Just because you have the position and power to speak out, it does not necessarily mean that you should do so. There has been plenty of backlash against those who think that because they have the position, they are somehow entitled to speak out. CEOs must construct the narrative carefully as this academic study of CEO activism points out. In their words: ‘Skeptics are quick to point this out: “Should a billionaire who rode technology to wealth and fame be trusted to help fix the problems his industry has exacerbated?” Scholars have already criticized how corporate organizations are cannibalizing issues that generally fall into the domain of NGOs and activist groups or leveraging social movements to generate profits, even depoliticizing its underlying social demand.’

4 It’s not all about you If a CEO is going to speak out, it might be coming from their mouth, but the rest of the organization must be on board. There must be no surprises for anyone likely to be affected by the message and its predicted reaction. It’s a good idea to make sure that internal stakeholders are aligned with CEO activism. It should also be clear whether CEOs are speaking for themselves or their organizations, although in all honesty any statements from the CEO’s mouth is likely to be associated with their company. Hence, the need to have proper integration and alignment of messaging and issue across the company.

5 Results? Like any strategic communication, results are key, and so it is imperative that there are metrics to assess the impact of activism established ahead of time. Be realistic about goals, but do ensure that you measure progress over time. After all, words and actions  that don’t drive some kind of positive result are not worth the risk.

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