Should Companies Take a Stand On Social Issues?

During last year’s election season, Koch Industries, run by conservative billionaires and Mitt Romney supporters Charles and David Koch, sent 50,000 employees a voter information packet listing dozens of Republican candidates, including Romney, that the company favored.

The packet contained information about voter registration deadlines and early voting options. Also, based on frequent requests, according to Robert A. Tappan, Koch’s director of external relations, the packet provided a list of candidates who have been supported by KOCHPAC, the company’s employee action committee. While Tappan said Koch does not support candidates solely based on their political affiliation and instead evaluates them based on who is willing to support economic freedom, most candidates on the company’s list were conservatives.

Ten days later In These Times, a liberal periodical, reported the Koch brothers had distributed an anti-Obama editorial. The news spread quickly, and false rumors spread that Koch would lay off employees who supported Obama.

According to the report, President and COO Dave Robertson wrote:“I believe the upcoming election will determine what kind of America future generations will inherit. If we elect candidates who want to spend hundreds of billions in borrowed money on costly new subsidies for a few favored cronies, put unprecedented regulatory burdens on businesses, prevent or delay important new construction projects and excessively hinder free trade, then many of our more than 50,000 U.S. employees and contractors may suffer the consequences, including higher gasoline prices, runaway inflation and other ills.”

Tappan said Robertson’s memo was a completely legitimate activity, entirely consistent with the law and the company’s record of public statements in support of free-market policies and publicly disclosed contributions by KOCHPAC to various candidates.

“We trust our employees to make their own decisions based on the factors that are important to them,” he said. “Over the course of decades we have publicly commented on the negative consequences of unbridled government spending and have opposed such practices regardless of the political party in power. Some [political] commenters have claimed that employees will ‘suffer the consequences’ of their vote. But again, this refers to economic and societal problems that will be the consequence of continued unchecked spending. Discussing these issues with employees isn’t coercion or intimidation — it is treating employees with the respect they deserve as self-determining citizens of the United States.”

Until 2010, federal law barred companies from using corporate money to endorse political candidates, and that included urging employees to support specific politicians. But the Supreme Court’s Citizens United decision freed companies from those restrictions, and now several major companies such as Koch are taking stances on controversial topics.

Taking a Stand
Donna Sturgess, founding partner and president of Buyology Inc., a marketing neuroscience firm, said she believes companies do this for two reasons. CEOs do it because they believe, individually, they have the right to have an individual point of view that is separate from the company, which she said is naive, or they feel their company has the right to stand for something that mirrors its values.

“If you say you have a particular value in something and then behave differently, that has to be explained,” she said. “You are trying to drive an entire organization of people to common goals, therefore they have to understand the common goals, and when you donate to controversial causes or take a stand on a controversial topic, people immediately want to know how that fits the values and goals they think they are working towards.”

That’s where American fast food restaurant Chick-fil-A went wrong, according to Hayes Roth, chief marketing officer for Landor Associates, a global brand consulting firm.

“If you make claims about being open to any constituents that want to come in, that you’re happy to serve anyone and everyone, yet you’re contributing to causes that are about curing homosexuality, that’s insidious,” he said.

In January 2011 the media reported that Chick-fil-A was co-sponsoring a marriage conference along with the Pennsylvania Family Institute (PFI), an organization that had filed an amicus brief against striking down Proposition 8 in California, which banned gay marriage. Then, on June 16, 2012, while on the radio talk show “The Ken Coleman Show,” the company’s president and chief operating officer

Dan Cathy said:

“I think we are inviting God’s judgment on our nation when we shake our fist at him and say, ‘We know better than you as to what constitutes a marriage.’ I pray God’s mercy on our generation that has such a prideful, arrogant attitude to think that we have the audacity to define what marriage is about.”

On July 2 he said this to Biblical Recorder, a weekly newspaper: “We are very much supportive of the family — the biblical definition of the family unit. We are a family-owned business, a family-led business, and we are married to our first wives.”

Roth said the company may have irreparably damaged its relationship with a core constituency because of its same-sex marriage stance. He said the company crossed the line into being exclusionary, and therefore offensive. Taking a stance on something controversial isn’t necessarily wrong, he said, as long as it favors inclusion. Linda Stokes, president and CEO of global diversity consulting and training firm PRISM International Inc., agrees.

“If organizations care about being in business, staying in business and continuing to attract customers from all constituency groups, they have to focus on inclusion,” she said. “Ellen DeGeneres’ JCPenney partnership hurt the company for a few days, but in the long run it didn’t hurt the business, and perhaps helped it. Everything lines up in favor of welcoming all customers versus being less welcoming to certain constituency groups.”

Communication Is Key
Doug Harris, CEO of The Kaleidoscope Group, a diversity and inclusion consulting firm, recounted a story of two companies that displayed a rainbow flag outside their facilities during Gay Pride Month. Both organizations had their flags ripped down. One organization’s CEO said, “This is what we believe in,” and put the flag back up, with security around it 24/7. The other company allowed employees to vote on whether they wanted it back up, and the majority voted against it. Harris said the company that took the flag down ended up seeing some retention issues and employee morale went down. The company that kept the flag up had employees squabble, but no one quit.

“The impact on being historically excluded is so much greater,” he said. “The historically included might see something they don’t like, but they go to bed and it’s over. For historically excluded, this is about standing up for a lifestyle, and they see this as their lifetime.”

When a company takes a stand, for inclusion or not, communication is key, Buyology Inc.’s Sturgess said.

“The chairman of the company, with help from other C-suite executives, should say, ‘We’ve supported this particular thing, and here are the reasons why. We’re not asking you to accept it; we just want to communicate our position. This is why we fall on this side of the issue; this is how it mirrors our values. We allow you to decide for yourself.’ They are explaining the company’s behavior, and when they do that, that brings a lot of comfort to the people who work there,” she said.

Sturgess said companies that do not do this risk creating cultural gaps and tension within their organizations. If the views on the inside do not match those on the outside, employees will create sites such as Cafepharma, an information site for pharmaceutical and medical sales professionals, to have meaningful dialogues about what is happening inside their organizations and in the industry.

“It used to be that organizations could control the message, and the message they wanted was the only message they got out,” Stokes said. “This is not the case with social media. Everything can be quickly reported, and employees aren’t shy to voice their opinions.”

When retailer Nordstrom Inc. jumped into the controversial gay marriage debate last October and openly supported the rights of gays and lesbians to marry, a company memo from President Blake Nordstrom said the company’s support of marriage equality “is consistent with our longtime philosophy of inclusivity and equality for our customers and employees.” As a result, the company saw little backlash in the market and little to no hostility on social media.

“We have a crying need, if not an imperative, for our leaders to be people we respect and admire, who are driving companies to growth in an economy that is pretty tough on business these days,” Sturgess said. “That touches on diversity. Great companies are built on the back of backing up diversity — diversity of talent, diversity from an ethnic and gender standpoint.”

Corporate Religious Advocates
Chick-fil-A isn’t the only company sharing its Christian faith with the world. These three companies don’t make religious products but take their religious beliefs seriously.

In-N-Out Burger: This fast food joint has printed citations of Bible passages on cups, wrappers and other pieces of packaging since the late 1980s.

Forever 21: Founded by Don and Jin Sook Chang, devout Christians who moved to America from South Korea in 1981, this store’s shopping bags have John 3:16 — a citation of a biblical verse popular among evangelical Christians — at the bottom.

Tyson Foods Inc.: John H. Tyson, the company’s chairman, is a born-again Christian who has said he believes his values shouldn’t be pushed to the side when he enters Tyson’s doors. The company employs a team of chaplains who minister to employees at production facilities and corporate offices.