A thorny choice facing companies: Do we get political?
A thorny choice facing companies: Do we get political?
In the run-up to the election, we’re looking at political polarization in America — specifically, the role companies play in intensifying or easing political divides — in our Office Politics series.
Today, we’re examining how the traditional view that companies should avoid taking a stand on political issues has been challenged. For more on this, “Marketplace Morning Report” host David Brancaccio was joined by Alison Taylor, executive director of the think tank Ethical Systems. She also teaches at the NYU Stern School of Business. The following is an edited transcript of their conversation.
David Brancaccio: It is a divided country. We know this from public opinion surveys; we know this from picnics with the extended family. Is this polarized environment a special challenge to businesses, in your experience?
Alison Taylor: One thing that’s very interesting is that up until about 2013 or 2014 we had a pretty clear consensus that business should not get involved in contentious political issues. There’s that famous joke from the ’90s: The Republicans buy sneakers too, Michael Jordan said. And then in 2018, 2019, there was a real rise in CEOs speaking up and taking positions on everything from climate change to immigration to human rights. And then, as we know, after Putin invaded Ukraine, [there’s been] lots of pressure on businesses to pull out of Russia. And since then, issues have become a lot more complicated, and I think leaders have become much more hesitant.
Brancaccio: Well, there’s that club of CEOs called the Business Roundtable that you well know, and some years ago, there was a, I think, a path-breaking statement that they made that, you know, it’s not just shareholder value. We have to consider many different groups of stakeholders: employees, the community, the Earth. I gotta say here, in 2024, I’m not seeing that that business roundtable pledge led to widespread change.
Alison Taylor: That statement was made in August 2019, and pretty immediately, a lot of academics pointed out that this statement did not seem to have much substance, not least because many of the CEOs had not consulted their boards or made formal governance changes before making this announcement. There’s a reasonable argument that the CEOs would not have gone ahead and made this declaration if they’d known the pandemic was coming and with it, all the scrutiny that we had on health care and labor rights and that kind of thing.
Brancaccio: Now, I went into a bar in Dingle, Ireland once that had a sign over the bar that said, “No Trump talk.” In other words, a ban on that type of discussion. I mean, companies, I guess, could try that: Don’t talk politics in the workplace.
Taylor: Well, some companies have tried that, and I gotta say, it did not work out very well for them. The obvious example is Basecamp, which is an interesting example, partly because the founders have also written books about how to have a great culture. And Basecamp banned political speech in the office; I think about a third of its workforce quit. But the actual speech it banned was the fact that the sales team had a list of customers with “funny sounding names,” who were mainly Asian or African, and someone pointed out this might be racist. And that was the political speech that was banned.
Brancaccio: By the way, Basecamp does software. I think they’re based in Chicago, right?
Taylor: That is correct. And at the same time, the CEO of Expensify, in the run-up to the 2020 election, emailed all his customers saying, “Vote Biden” — which is absolutely unthinkable even a decade earlier.
Brancaccio: I was surprised in our reporting for this to learn that it’s legal for companies to lean on their employees to vote certain ways. I mean, it can’t be part of your formal performance review.
Taylor: You know, I fear that we are galloping towards a world of red banks and blue banks and red mattress companies and blue mattress companies, and companies are already starting to need to have a state-by-state strategy on DEI and ESG issues, because there’s so much litigation going on at the state level. All of this is terrible for efficiency and it’s terrible for business.
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