Playing Politics on Social Issues

In the run-up to last month’s general election, a group of more than 50 current and former CEOs from Minnesota took out a full-page ad in the Minneapolis Star Tribune declaring publicly their opposition to a constitutional amendment that would have banned same-sex marriage in the state.

The CEOs, which included General Mills’ Ken Powell and Jim Pohlad from the Minnesota Twins, said in the ad that the measure, if passed — and therefore banning same-sex marriage — would have an adverse impact on the state’s business climate. They were successful; the measure was rejected.

More than 70 major businesses — of which about 40 percent were Fortune 500 firms — have made similar public statements supporting same-sex marriage or opposing gay-marriage bans in the last two years, according to a study by a Washington, D.C., gay rights advocacy group, Human Rights Campaign (HRC), reported in The Wall Street Journal earlier this year.

In contrast, just three companies — Google Inc., Levi Strauss & Co. and PG&E Corp. — spoke out against California’s proposed gay-marriage ban four years ago during election season, according to the HRC study.

The findings were part of the group’s Corporate Equality Index, which found that a record 252 businesses achieved a top rating of 100 percent this year based on how suitable their workplaces are in terms of policies, benefits and practices for LGBT employees. The companies included Lockheed Martin Corp., AMR Corp., Apple Inc., General Motors Co., American Express Co. and Dow Chemical Co.

In comparison, just 13 businesses earned a 100 percent rating in the inaugural index 11 years ago. “LGBT-inclusive workplace policies are not only the right thing to do and good business practices — they are the new normal,” said HRC President Chad Griffin in a statement announcing the index in November.

Why are companies increasingly making their voices heard on a potentially controversial political issue?

John G. Taft, CEO of RBC Wealth Management, was one of the CEOs to publicly express this sentiment in the Minnesota newspaper advertisement. He said the act of banning same-sex marriage in the state would undermine the growing demographic shifts among its population, in turn affecting how the company related to both its employees and customers.

The other reason Taft provided — which he also explained in an op-ed on the Harvard Business Review Blog Network — was a general awareness of corporate social responsibility. Sometimes companies need to provide more than just dollar value for shareholders or quality service for customers, he said. Sometimes companies need to do “what’s right.” Both elements, he said, have the potential to impact a company’s top and bottom lines.

“What’s happening today is that businesses are increasingly competing not just on the basis of price or quality or service, but they’re competing in the marketplace for values and ideas,” Taft said.

Indeed, the rise in public outcry by companies on such critical issues should come as a welcome development to corporate diversity leaders. But at what point does a company risk going too far with support on a potentially controversial social issue? Might it risk alienating those who reside on the other side of the argument — employees and customers?

Taft said every business decision comes at the risk of alienating someone — whether a customer, employee or otherwise. And if businesses choose to remain neutral in the public view on a social issue, even though it embodies certain values internally, that’s an acceptable decision.

But for the companies that do choose to take a public stand, the business proposition of expressing those values to attract talent and business in the modern environment offers value on multiple levels.

“In this day and age individual employees want to work for a company that reflects their [individual] values,” Taft said, “and customers and clients want to do business with companies that reflect their values.”

Frank Kalman is an associate editor of Diversity Executive magazine. He can be reached at fkalman@diversity-executive.com.