If you have followed the news even minimally over the past two weeks, you noticed CEOs speaking out against the new Georgia election law.
The CEOs received accolades from voting access activists and suffered threats from the Georgia legislature and the minority leader of the U.S. Senate.
Of course, the controversial election law is not the first and will not be the last matter to elicit pressure on corporate leaders to speak out. Nevertheless, leaders’ decision to engage is dicey. Why? Because their most significant stakeholders hold disparate opinions on any given issue.
Any stand a company leader chooses is very likely to be met with praise by some and disgust by others. Yet, in today’s world, leaders have no place to hide. Inevitably they will face pressures from their employees, customers, and others to speak out publicly on controversial topics.
Most companies are woefully unprepared to make quick decisions concerning whether or how to engage when their stakeholders pressure them. However, leaders cannot afford to be surprised by calls to action. Hasty responses can be dangerous.
Wise leaders will put their just-in-time methods behind them and design systems to enable thoughtful and timely decisions about responding to social and political issues important to their stakeholders.
Leaders Aren’t Prepared to Act on Stakeholder Pressures
These days almost everyone expects corporate CEOs to address social issues, according to the latest Edelman Trust Barometer study. Therefore, leaders need a plan for how to handle the controversies.
Last year, my research team partnered with the Association of Corporate Citizenship Professionals (ACCP) to study methods companies use to determine if, when, and how to respond to stakeholder pressures for activism on social and political issues. The results show few have a solid plan for dealing with the controversies.
Many Register Concerns but Few Have Answers
The study results revealed a leadership dilemma: Almost all leaders of corporations are concerned about pressures from stakeholders to act, but few know what to do.
While almost half said their companies had engaged in social or political activism, they lacked a straightforward process for evaluating the best path to take when faced with stakeholder demands.
Companies Fall Back on Existing Activities Relevant or Not
A third of those who participated in the study reported more aggressively communicating the commitments and accomplishments of their current corporate social responsibility (CSR) or sustainability efforts. The problem with this approach is the activities may not directly address the issues in question.
Some Turn to Others for Solutions that Remain Elusive Nevertheless
And several said they are researching how other companies are handling these pressures. However, since so few companies have solid strategies, this approoach may not provide much guidance.
A Few Proactive Companies Design Systems for Acting
Now is the time for company leaders to become proactive regarding how they will respond to social and political issues.
A few leaders who participated in our study said their companies had developed frameworks or systems for guiding their decision-making regarding engagement with topics important to their stakeholders.
Regardless of how formal their strategies, the participating companies with a framework or a system all took the following three steps:
- They clarify the purpose of the system and processes.
- They establish their guiding principles.
- They design a process for making decisions.
Systems Serve a Purpose
All emphasized their companies do not tie their systems to any specific issues. Nor does the existence of a strategy mandate action….