The Risks and Rewards of CEO Activism

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Credit: istockphoto.com/microgen

Credit: istockphoto.com/microgen

Over the past 18 months, the climate in the U.S. has changed dramatically as business and policy have intersected more deeply than ever before. When dozens of CEOs spoke up about the new U.S. administration’s decisions regarding issues like climate change and travel to the U.S. from select countries, for example, social media ignited, protests erupted and media attention exploded. Navigating how to communicate a company’s point of view in this environment is becoming increasingly complex and important. Future generations will only pay closer attention to how companies communicate about their values when it comes to deciding where to work or who to purchase from.

Indeed, nearly one-half of millennials (47 percent) believe that CEOs have a responsibility to speak up about issues that are important to society, far outpacing the sentiments of Gen Xers and baby boomers (28 percent each). An even larger six in 10 millennials (56 percent) say that business leaders have a greater responsibility to speak out now than in years past. This is according to “CEO Activism in 2017: High Noon in the C-Suite,” a study of 1,000 American adults commissioned by Weber Shandwick with KRC Research.

Our study showed that CEOs speaking out on hotly debated current issues comes with both risks and rewards. We recommend the following guidelines when considering a decision to speak out:

1. Establish the link between the issue and the company’s values.

Traditionally, CEOs have been expected to convince investors and other stakeholders why a particular decision is good for the bottom line. Recently, we have seen a segment of CEOs commenting on issues not directly tied to their company’s bottom line or core business, but perhaps reflecting the values of their organizations, such as LGBT rights, climate change, gun control, racial discrimination or immigration policies. Making the “business case” was not a requirement for millennial respondents, as 37 percent of them said they are more favorable of CEOs who take a position on an issue even if it’s not necessarily tied directly to the company’s core business.

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