With an ongoing war in Europe, an ongoing public health crisis, and various social issues gripping America, corporate executives increasingly find themselves facing questions from employees about whether or not they plan to take a stand.
But if CEOs were to take a stand against this backdrop, according to Edelman CEO Richard Edelman, it shouldn’t be representing the company.
“They should speak out as citizens, but they shouldn’t speak out as CEOs,” Edelman recently told Yahoo Finance at the World Economic Forum in Davos, Switzerland (video above). “And the CEO position, again, this remit of issues can expand beyond the long length of my arm. And we better be careful here because there’s starting to be a pushback against wokeness.”
Disney (DIS) recently found itself in the crosshairs of Florida Gov. Ron DeSantis after he signed that “Don’t Say Gay” bill and Disney denounced the legislation after employee outcry.
“You have to put priority on those [issues] that are directly affecting your business,” Edelman said. “Again, supply chain or health of your employee base. But on ones where it’s a matter of personal choice, leave that for your personal politics and donations to senators. But your mandate as the CEO is to stand up and speak up only on those issues where you actually can add value.”
According to Edelman’s 2022 Trust Barometer, “more than 8 in 10 respondents want CEOs to be the face of change, leading on policy, not on politics.” In the survey, business outscored government by 53 points on competence and 26 points on ethics.
“Business became the most trusted institution two years ago, January,” Edelman said. “And that’s continued in this study. And the most important fact, though, is the gap in competence between business and government is [over] 50 points. So when you think about why are businesses being asked to do so many new things, it has everything to do with competence. They get stuff done whereas government just leaves the ball.”
This became especially apparent after Russia invaded Ukraine: Nearly 1,000 companies, including from the U.S., pulled operations out of Russia in response to the unwarranted actions, including McDonald’s (MCD), Amazon (AMZN), Apple (AAPL), and PayPal (PYPL).
“I think what’s been clear is even McDonald’s has gotten out,” Edelman said. “You see Allianz leaving. This is a continuing process of companies getting out of Russia. I think there are only something like 500 major companies left, 1,000 gone. So the change is significant because it’s economic as a priority for business, 85%. But 78% say it’s to do with societal issues. And then 60% say geopolitical issues in terms of order of business.”
Edelman compared it to how it “took 20 years to get 200 companies” out of South Africa in response to the country’s apartheid.
“Here, it was 10 weeks and 1,000 companies out,” he said. “And it’s because there was a huge expectation by both employees and customers that companies would act. In fact, in our trust study, we found that companies that got out, 31 point jump in trust. Companies that stayed in, 38 point drop in trust.”
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Adriana Belmonte is a reporter and editor covering politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at [email protected].
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