CEOs: Caught in a Quagmire Taking a position on controversial social issues – Yes or No?

Connectivity has revolutionized our world. But it can be a double-edged sword, triggering unwanted attention and unintended consequences. When mere keystrokes can affect the fate of your company, it’s best to have a strong handle on your online communications.

We’re in the age of 24/7 social media where reputational risk must be carefully managed by the CEO and board. To that end, are organizations built to weather the storm of intense public opinion, protests, boycotts, or character bruising as a result of wading into polemic social justice issues?

With the intensification of local, national, and global causes and movements, we find ourselves in the midst of social media mania stemming from copious clashing of perspectives with many corporations teetering on the edge of a virtual abyss.

C-suites and boardrooms across the spectrum are deliberating on the intensifying marauding atmosphere of our digital landscape and asking: should CEOs take a position on divisive, controversial topics? But will plugging into the frenzied wired world find you on the wrong side of history? And is there even a ‘right side’ in an era of complex duality? Corporations can quickly become compromised in a blurred allegiance to revolving communal concerns or, in contrast, chastised for ignoring humanity’s ongoing trials and tribulations.

Much like a Roman colosseum, the online realm can be a tumultuous and treacherous arena with a rising anger quotient jeopardizing the very existence of social etiquette. Increasingly, there is a harmful frequency racing through the feeds. If you state your mind and offence is taken, your social media is soon filled with missives of ill intent, rendering your communication platforms beyond your control.

Digital activists wield words as weapons to initiate a viral takedown of those who hold contradictory perceptions or perspectives and carry the ‘wrong’ protest placard message. “Pick a side” is an anthem heard across the web, and on the streets, as spreading schisms of many stripes embroil the business world in thorny deliberation of what constitutes corporate citizenship in our global village.

The Israeli-Hamas conflagration and deepening humanitarian crisis is triggering enormous debate across all media. There’s no winner here. Should you enter the riled-up, free-for-all discourse, you won’t come out of the fray without serious scrapes. It’s a murky, division-laden situation born of millennia-old grievances with life and death consequences – as well as severe financial repercussions. As an example, Boycott, Divestment and Sanctions (BDS) is a Palestinian-led global protest movement against Israel drawing in consumers and corporations by way of economic and cultural boycotts. In recent years, the number of citizen groups and their causes has escalated considerably, and it has become far more challenging for the business world to avoid entanglement and maintain operational status quo.

It’s in this toxic soup that CEOs find themselves. The web is prime real estate in which to promote business, but it can be an ugly terrain with unforeseen detours that negatively impact your corporate brand. What level of pressing societal issue warrants a response from the CEO?

Should a CEO speak up on divisive social issues, and if so, when & how?

No matter the issue, a CEO’s public comments are sure to be misunderstood, taken out of context, and will undoubtedly upset some of its shareholders, employees, customers, and suppliers.
Once a CEO speaks on one significant social issue, and then doesn’t on another, they risk being seen as complicit/supporting the behaviour related to the issue not addressed.
Is it possible to separate the individual from the CEO? Can a CEO speak as an individual versus as the CEO of an organization, without corporate ramifications?
Are there situations of such significance that regardless of the ramifications of speaking up, a CEO should do it anyway?

A virtual free-for-all

In our fast-moving digital age, there’s a proliferation of corporate missteps and CEOs who are experiencing a demeaning fall from grace. Clearly there are CEOs more than willing to expose themselves – and their company – to ridicule and a revenue-squashing domino effect. CEOs continue to speak out of turn or disclose personal beliefs, either to their own detriment, or it’s the bridge to die on, such is their self-allegiance.

Major overreach can lead to unwanted consequences. Depending on how cringe-worthy the offence is viewed, the damage to corporate image demands immediate public relations tactics in order to move to a defence position, craft an apology, and roll out the manner in which to make public amends to remove the taint off your brand. Apology videos are now the new art form in the world of celebrity and C-suite domain.

In the matter of expressing opinions on dicey issues, it must be noted that there is a significant difference between the boundaries of a CEO of a publicly-listed company, as compared to a private company CEO run by a founder. In the scenario of a public company, the CEO is speaking on behalf of the organization – all stakeholders, and therefore, board approval is required. This is a preventative measure to thwart any adverse risk or negative affects.

Without board approval, a CEO who goes public in debate-mode on a divisive issue may face a career ending outcome, in addition to jeopardizing the company in critical ways such as financial, reputational, or overall stability.

Whereas a private company CEO & Founder has much more latitude and flexibility in decision making. That could mean getting into trouble more easily. Founder CEOs have more skin in the game with personal monies invested. This CEO could also be the majority shareholder which means the board members serve more as advisors than those directors tied to publicly-listed entities. It can be an additional challenge for a board to rein in unruly action, promiscuous activity, and bold outbursts of a CEO who operates in maverick mode.

Safeguarding the rights of others is a noble goal. But as a CEO, whose rights are you protecting and who is being cast aside? More to the point, who are you to distinguish between the two? And why is that a CEO’s duty in the first place? Furthermore, how do you speak as one entity when you have a board of directors and broad stakeholder groups comprised of diverse cultures, personal values, and political attachments? Is participating in hazard-filled, and at times, hate-fuelled activism truly worth endangering your company’s viability and prosperity?

Causing commotion: CEOs in the doghouse –
for speaking out when they shouldn’t and NOT speaking out when they should

The Hall of Infamy. It’s not a list any CEO wants to be on. Unless they are impervious to denunciation and have a facility for bouncing back from conspicuous misadventure. Here’s just a smattering of chief executive officers who have been called out for recklessness and imprudence:

Bezos

Notorious former CEO of Amazon and Founder Jeff Bezos has been labeled as “opportunistic” with a reputation for “aggressive business practices” and “high velocity decision-making.” There’s been longstanding allegations against Amazon – which has a brand value of $350 billion – including low pay, constant pressure to work faster, and unsafe conditions spurring injuries on the job.

Some of the visionary ecommerce entrepreneur’s calculated moves turn in his favour. A strategy implemented by Bezos, decried as controversial, proved highly advantageous when he pioneered crowdsourced customer reviews. Considered a threat to Google and retail suicide, his idea to encourage buyer feedback including rants actually helped his fledgling Amazon platform reach new heights.

Bezos, who dropped in rank to second richest man in the world in 2022 (bumped by Elon Musk), came under fire yet again when he made a suborbital space flight in 2021, then thanked his Amazon workers for paying for it. With the world affected on all fronts due to the pandemic, the space jaunt was seen by many as a tone-deaf message, prompting #TaxTheRich to trend alongside a Change.org petition calling for Bezos not to return to Earth. At the same time Bezos reached new heights – literally – by way of Blue Origin, his space venture outfit was accused of having a “toxic culture” and “safety issues.”

Branson

Fellow business magnet, Richard Branson of Virgin Group, also got flak for a similar space mission viewed as a profound display of inequality as it underscored the realms of space as an “exclusive playground for the ultra-rich.” Virgin Galactic shareholders have filed suit against Branson for allegedly hiding issues with his space program. In 2020, Branson took heat for the ‘double standard’ optics of going to government, hat-in-hand, requesting billions to bail out the airline industry, while asking his staff to take eight weeks unpaid leave during the pandemic. In the court of public opinion, Branson dismissed backlash caused by both his galactic flight and pleas for funding. In 2019, he was slammed for writing a blog entitled “Happiness doesn’t come from stuff” prompting a flood of indignant tweets calling Branson “tone deaf” and patronizing.”

Wilson

Chip Wilson, Founder of Lululemon, and CEO until the company went public in 2005, got caught in a fracas over controversial statements that he was in favour of child labor because it builds wealth and pulls third world nations out of poverty. At one point, Wilson blogged to his mainly female customer base that breast cancer was caused by “Power Women” who smoked, used the Pill, and were stressed by work “previously left to men in the working world.” As well, Wilson created headlines with remarks regarding larger women not being suited to Lululemon leggings due to chaffing and fabric sheerness issues, adding that it costs too much to manufacture above size 12. Wilson was forced by the board to resign his role as chairman one month after his comments and left the company in 2015. His CEO replacement, Laurent Potdevin, lasted until 2018 when he resigned after he “fell short” of company standards of conduct.

Kalanick

Co-founder and former Uber CEO Travis Kalanick, embroiled in discrimination and sexual harassment charges, found himself in further hot water after a 2017 video revealed his argument with an Uber driver who raised concerns about decreasing pay rates. The driver also told Kalanick that “people don’t trust you anymore.” Kalanick replied: “Some people don’t like to take responsibility for their own s**t. They blame everyone else in their life on somebody else. Good luck!” Following six months of endless scandal, Uber investors forced Kalanick to resign from the ride-hailing app giant via a ‘Dear John’ letter entitled: “Moving Uber Forward” when his reputation for ruthless ‘bro’ machismo proved too onerous to manage.

Al Baker

Upon his appointment as Chairman of the International Air Transport Association (IATA), the CEO of Qatar Airways, Akbar Al Baker was asked about the lack of women in aviation in the Middle East. Regarding his own position as CEO, he stated: “Of course, it has to be led by a man because it is a very challenging position.” Soon after Al Baker issued a “heartfelt apology” and Qatar Airways fought off accusations of sexism with the sudden creation of the IATA Diversity & Inclusion Awards.

Sharma

In 2022, Vivek Sharma, CEO of Fairmont Hot Springs Resort, got mired in quicksand at a tourism industry conference when he asked females in the audience to stand for International Women’s Day. After applause he then said, “go clean some rooms and do some dishes.” Hearing groans of disapproval from his audience, he quickly apologized and a week later issued a public statement sharing that he deeply regretted his “insensitive and inappropriate comments.” Under pressure, he resigned from multiple industry boards and his resort employer placed Sharma on immediate leave.

Musk

Major conglomerates recently abandoned advertising on X (formerly Twitter) in a show of force against a tweet endorsed by Elon Musk perceived to be antisemitic. The billionaire owner, self -described as a ‘free speech absolutist,’ countered the exodus with candid contempt, more concerned with assailing censorship than decrying their exit.

Gay, Kornbluth, and Magill

Harvard President Claudine Gay, MIT President Sally Kornbluth, and University of Pennsylvania President Liz Magill are prime examples of leadership on the brink currently rampant on campuses as students, faculty, and administration clash over acrimonious issues.

Tik Tok was ablaze with video of Magill testifying at a U.S. House committee on antisemitism regarding the school’s code of conduct policy failing to protect Jewish students amid fallout from the war in Gaza. Repeatedly asked by Rep. Stefanik whether “calling for the genocide of Jews” would violate Penn’s anti-bullying and harassment policy, Magill skirted the issue, replying: “It’s a context-dependent decision, congresswoman.” Following her testimony and after several months of criticism – especially from donors – Magill was asked to resign along with Penn’s chairman, Scott Bok, over the university’s mishandling of perceived acts of antisemitism. Both Gay and Kornbluth are under pressure to follow Magill in tending their resignation.

Campuses throughout North America and the world have seen an increase in antisemitism since the start of the Hamas-Israeli war. While academic freedom and free speech are principles integral to higher education, the challenge of finding the right balance between promoting free expression and keeping students safe was on full display at the recent hearings when the presidents dodged simple yes or no questions.

There are circumstances that irrevocably demand leadership intervention. For instance, on campuses with students holding contravening viewpoints with the threat of escalation leading to violence. Whereby free expression is risking the welfare of others, it’s imperative that university leaders take a firm stand against hateful sentiment and speech that calls for violence towards a particular group, and not only sets clear policies to protect ALL students from words or actions that put them in harm’s way, but also lays clear the consequences for those who break such policies.

Whether in the academic world or in the business realm, addressing inciteful speech need not curtail or prohibit freedom of expression. The policy of good governance is to protect both speakers and listeners from true threat, bullying, intimidation, and harassment.

Democratic societies fully benefit from free expression. In the current heated climate, it’s necessary to pay close heed to how beliefs and attitudes are exchanged, so as not to throttle discourse and endanger the right and privilege of speaking one’s mind.

Pathways & Pitfalls: Ways to navigate opportunities and circumvent crisis

Opt-in

Gauging the chaotic state of our world, a lack of effective leadership is indisputable. Global citizens are calling for strong governance in the absence of cohesive civic guidance. No surprise then to see The Eldeman Trust Barometerⁱ indicate that the general public has more trust in business than other institutions and desires more leadership from the private sector to help mend our fractious world.

A large segment of today’s consumer is favouring brands that actively attach to a purpose or issue. A marketing studyⁱⁱ shows nearly 2/3 of Millennials and Gen Z prefer brands who have a point of view and stand for something. Kantar Consulting’s Purpose 2020 Report “Inspiring Purpose-led Growth” states that brands with a high purpose had increased valuation of 175% over the last 12 years, growing twice as fast as competitors. But let’s be clear: championing environmental sustainability is a lot different from waving a banner in favour of a warring populace. Pick your battles very carefully.

If there is a hot button issue that is affecting the functioning of your company, business operations, and the bottom line, then it is prudent to communicate a corporate response. There should be very clearly defined situations only and sanctioned by the board to ensure alignment with the organizations mission, values, culture, and corporate purpose. Thoroughly review your goals before making your position known. Ensure your communications team understands the assignment – don’t let your message stray. Walking such a tight rope will test the mettle of your PR/digital media department.

If you choose to back a specific group politically or socially, the stakes should be extremely high to justify the action. So, if you’re compelled to participate as a corporate entity and enter the feverish quarrel of social and political public opinion, you’ll find yourself thrashing through a dense jungle of blame as to who’s more right and who’s more wrong. Is there a road back from that? You may go into freefall as you find the division amplifies across your social networks, reverberating throughout your organization, and most significantly, directly to your customers who may wonder why social and political circumstances outside the realm of your products and services are driving your corporate mindset. It’s worth mentioning that it also can harm recruitment if prospective employees view the lobbying of interests as not compatible with their own, or with the company’s stated mission.

Question all motives. Why are you compelled to comment? What difference are you hoping to make? Will it benefit or harm your organization? Ultimately, you must ascertain whether you are merely submitting to cancel culture pressure. And then ask yourself how soon you will be mired in the next quagmire and forced out of the discussion when some invisible line is crossed. Be wise and cautious when confronted by strident demands for your involvement in high-risk political/social interface. Consider whether you are in the throes of an emotionally charged onslaught versus a logical, intellectual argument which is mindful of the larger, long-term responsibility to the welfare of all who make up your business enterprise. Be swayed by impassioned sentiment at your peril.

If you capitulate to pitchfork mob mentality, you may find you are abandoning the rudder of leadership. Should you sacrifice your voice to appease those making the most noise? Who’s wagging the tail? If you bow to the external aggression of armchair experts regarding incredibly complex issues that would give even Plato pause, how do you regain control of your messaging? There’s no leeway to be had. Oh, what a tangled web we weave!

Opt-out

“When everything is moving and shifting, the only way to counteract chaos is stillness. When things feel extraordinary, strive for the ordinary. When the surface is wavy, dive for quieter waters.” Kristen Armstrong

Shush! Opting-out is a potential pathway and does not necessarily indicate a total lack of response. Refusing to delve into searing social justice issues or dire global situations and just go about your business is embracing a stand to not make the waters murkier.

In our social media age, companies need to be circumspect when engaging in disputes, or otherwise, turning a blind eye. Fair warning: silence can have its own consequences. Staying mute on provocative subjects may make you appear too timid to state your position for fear of upsetting your customers and, instead, protecting your profits and placing your corporate needs above all else. Fence sitting is safer, but you may lose customers or funders who expect you to acknowledge what they see as crucial social and political concerns.

Not weighing in is fine but outright dodging a topic that your customers feel invested in may warrant review. Some companies are reportedly ‘green hushing’ by avoiding addressing sustainability obligations and exaggerating or underplaying their eco efforts to avoid public scrutiny or running afoul of regulations.To remain free of negative social media discourse, you can’t hide under your desk. Be mindful of your impact. Keep a clean house. Assess if there are any associations which could be perceived to be harmful in some manner or profiting in dubious ways. Those red flags may eventually be brought to light, and you’ll be rapidly pulled into the pit of public ire.

Companies may find forging an alliance with a trustworthy philanthropic organization is a legitimate – and tame – manner of tending to a social worry. Having moral-focused policy is advantageous in that it will align with customers and reflect a positive public image. Larger corporations may have the means to establish a foundation in which to channel funds to various causes, thus allowing a certain distance from potential rancor.

Mind your words: maintaining & protecting reputation

Regardless of whether an organization is a publicly-listed corporation, a private enterprise, NFP, or Crown Corporation; when a CEO publicly takes a position on a controversial social issue, it becomes intertwined with the organization, the voice of the company, and its stakeholders.

With the use of social media platforms, companies are exposed to a deluge of opinions and feedback. There’s a watchdog mentality and mechanism built into cyberspace that brings a spotlight to business behaviour as never before. Sharing of information is accomplished in mere seconds, often followed by ample feedback with which to sort through. The larger your organization, the more in-depth online and public interaction stratagem is required.

To ensure good governance, a comprehensive corporate social media policy is necessary. There are numerous and rigorous resources available to apply to social media planning and execution. Below are some suggestions to help navigate online interaction in a secure, efficient manner:

Engage a professional social media manager.
Appoint gatekeepers to oversee decision-making process.
Identify decision makers to guide social media strategy and daily online operations.
Have clear goals that are set, measured, and reported.
Prepare language guidelines for inclusivity and accessibility.
Include privacy and confidentiality requirements.
Publicly share your security and privacy guidelines.
Clearly state copyright guidelines.
Assess the need for regulation compliance if appropriate to your organization.
Know how to manage and mitigate risk for your brand.
Have systems in place for contingency plans and crisis response.
Make public statements with unbiased messaging.
Continually and carefully monitor comments.
Stay alert for phishing, scams, fake accounts, and hacking occurrences.
Promote social media training for managers and employees including conflict resolution.

Tackling social woes and partisan political mayhem through the global town square of X, fast fading Instagram snaps, and self-proclaimed experts populating LinkedIn op-editorials can appear as posturing and pandering. Avoiding a diatribe approach and denunciation of specific groups is obviously highly advised. Depending on your tone and tact, keyboard activism can be another form of cyberbullying. Maintaining respectful exchanges can help limit debate and lessen the threat of distancing your social media followers.

If you’re obtuse or ambiguous in content, readers may glean alternative meanings and you might find yourself unable to unscramble your message from the clever clutter of scribes who have interjected their beliefs and thus, hijacked your platform. Don’t feed the trolls. Diplomacy and sensitivity are much needed especially as your brand is forever attached to the message.

A sphere of influence: just a click away

The world shifts rapidly and without warning. It can prompt the release of unimpeded messaging that is lacking in forethought, underlining the pressing need to integrate good governance into your corporate online engagement, and adhere to the directives of your social media policy. When engaged in social networking, keep to the truth of your CEO duties and to your organization’s mission. Clarify your imperatives as CEO with transparent board buy-in, lest you lose your way.

Declare core values of your organization and herald them far and wide to ensure that you are clearly heard and highly visible in a stance of neutrality, acknowledging the dichotomy of discourse, rather than picking sides in battles well beyond your purview. Practice what you preach: aligning your public communication as it relates to your corporate values will go a long way in being heard amidst the virtual din of cyberspace. LinkedIn, Facebook, Instagram, Tik Tok, YouTube, Rumble, the Twitterverse – whichever space you inhabit – wisdom, thought leadership, and authentic missives are the key to building trust, connection, and enhanced reputation.

About Lansdowne Board Intelligence

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