I have written from time to time about the increasing pressure on leaders of organizations, including corporations, to “engage in the public square” in ways that would have been highly unlikely not so very long ago. As reckonings on multiple civic or societal issues continue, it is hard to recall a more challenging time for leaders to assess their tolerance for risk – or their aptitude for engaging in substantive debates on climate change, racial equity, economic disparities, and geo-political dynamics, just to start the list of potential topics. Communications professionals need to take up the challenge of helping organizational leaders navigate these challenges.
On Monday, the New York Times provided a great analysis of the recent uptick in ‘CEO Letters,’ an increasingly common form of collective action for business leaders. On one level, it is easy to discount the decision to join a large group of executives in sending a shared message into the atmosphere (they are rarely demands for explicit action or addressed to explicit decision-makers). As one signature of many, there is little-to-no-risk of being held accountable if change does not result. But it should be noted that those letters do reflect a shifting calculation – or perhaps better described as an updated balancing – on the weighting corporate leaders are assigning to their various stakeholders.
For the past thirty years, the demands of institutional investors were inarguably the driving force of publicly-traded companies’ calculations related to emerging issues and controversies. That prioritization was even documented by the prestigious Business Roundtable in 1997 in the form of a CEO letter, stating that the purpose of corporations is to benefit shareholders.
By 2019 that same group, representing almost two hundred chief executives, issued a new CEO letter and declared that corporations exist to ‘create value for all our stakeholders.’ It was perhaps a belated acknowledgement that the social compact between private enterprise and public good is due for significant review, reflection and re-articulation. What are the benefits that businesses derive in our society (tax laws, public infrastructure, etc.) and how do they operate in exchange for those benefits? While politically progressive voices may have attracted the most attention in recent years, the concerns were mounting more broadly: about income disparity; about the shrinking (some said collapse) of the middle class that was a hallmark of U.S. growth for two generations.
And then 2020 happened. The fault lines of the prevailing social compact were laid bare: “essential” employees paid below minimum wage; a booming stock market spurring executive compensation while millions of other people lost their livelihoods; the threat of the pandemic spread unevenly between people with access to health care and those without. In parallel, new levels of concern about American competitiveness rose across a range of critical industries, as well as acknowledgement that global supply chains create vulnerabilities that might need to be addressed. And so, perhaps, we have an extraordinary opportunity: to re-imagine some aspects of the social compact between corporations and the public, in ways that serve both the common good AND strengthen our competitiveness as a nation.
But it will take meaningful engagement from multiple players, not the least of which are those who speak for our corporate sector. There are risks associated with engagement in the public square. But at this extraordinary time in our history, the risks of missing the corporate voice in re-imaging our future are more concerning.
