Marketing on Sofa

Over the last years, we are witnessing CEOs speaking up and out on a wide range of societal topics. Even though only very few of them engage in activism in one form or another, the world is writing a new chapter in corporate leadership and communications. Numerous studies claim the increasing demand for corporate leaders to be vocal on societal issues, but the effectiveness of such devotion is disputable. Shall CEOs speak up, where is the Rubicon between social and business, and what are the benefits of CEO activism, discovers the article.

For decades big corporations and their CEOs have been actively lobbying for favourable regulations or promoting corporate social responsibility campaigns that benefit the bottom line and the planet. Lobbying has not vanished. On the contrary, it has gained a new angle in the face of a CEO. CEO activism is a comparatively new direction in the business world and corporate communications in particular. While academics build theories around it, PR agencies sell the service to potential customers. This tendency demonstrates “a major shift in the role of corporate leadership“. Today, this is no longer a trend but a reality.

So what is happening across the globe? America’s top managers have been engaging in activism for some time. The global network is bombarded with news on immigration, human rights, poverty, global warming, and other matters which shattered society during the last decade, with CEOs steering the media wheel. John Donahoe, President and CEO of Nike, speaks out in support of the Black Lives Matter movement, committing to invest $40 million to organisations addressing racial inequality. Tim Cook, the CEO of Apple, openly supports the LGBT community and donates millions to charities. Amazon CEO Jeff Bezos is very outspoken on immigration reform and is constantly criticising Trump’s policy. They are brave to jump into controversial topics, signalling that their companies have a higher purpose beyond increasing revenues and making shareholders happier.

Yes, CEO activism is rapidly booming in the US, but it would be wrong to say that it is a predominantly American phenomenon. European corporate leaders are more concerned with practical problems, are not used to jumping into hotly-debated topics, traditionally remain careful about world challenges, and prefer keeping a low profile. For instance, many European top managers are likely to speak about crucial long-term-playing issues, like environment, climate, diversity, or when the matter is of strategic importance to their business. The CEO of Danone, Emmanuel Faber, reinforces the idea to restore biodiversity in the world’s food system. Without a shadow of a doubt, the theme is essential but is not the talk of the town. Danone operates in the food sector; therefore, the industry’s sustainability, in general, is central to the existence of the company. Choosing the safe path is a smart move as it does not harm the company but endorses its existence.

There are, of course, many other drivers for CEOs to speak up. CEOs see strategic reasons behind social engagement, like creating a more substantial brand value, boosting sales, and having a more powerful position among competitors. All of these are critical in orchestrating the company and making it run successfully and fundamental for the vitality of a company. Another group of CEOs may have a hidden personal intention to go public about a particular cause. Be it related to a narcissistic nature of a person or any other psychological need, CEOs are willing to build a personal brand, nourish an ego and get more media attention to their personality. The mounting pressure from society, customers, employees, or other stakeholders, might also drive top managers to become active. Society leaves no chances for Facebook or Google to hide behind the curtains. Lastly, personal ethics and values can be a solid driver to speak up. Ethics and trust are ways of doing business the right way, which always resonates with people.

Probably the latter one is the most important these days. The traditional view on business introduced by a Nobel prize winner Milton Friedman to look at it as a profit-maximising activity is obsolete in the XXI century. The business has a broader spectre of responsibilities today. The 2020 Davos Manifesto claims that the goal of a business is to continuously satisfy the needs of its various stakeholders, not purely the shareholders. In brief, stakeholders are becoming the spine of the business, their expectations towards companies increase, and their trust becomes indispensable. All eyes are on stakeholders now, with CEO activism in the lead.

Winning hearts, minds and wallets

The impact of CEO activism on public opinion and consumers is the most exciting part of the discussion. One of the latest studies looked at whether Tim Cook’s public statements on Indiana’s religious freedom law impacted public opinion and people’s willingness to buy Apple products. Surprisingly, Tim Cook neither shaped nor shifted public view to an extent where an ordinary politician or another CEO would. What happened is that consumers who knew that he supported same-gender marriage were more likely to purchase Apple products. A crucial point here is that consumers must be optimistic about the cause and have the same line as the CEO, which will make them excited and influence the purchase decision.

Further to this, PR companies also studied the subject and revealed an increased demand of different stakeholders for business leaders to speak up on societal matters:

• Consumers are looking for leaders to take an authentic stand on issues that significantly impact society

• Communication and marketing professionals see a positive tendency on company reputation when their CEO goes public on provocative subjects

• Millennials are convinced that CEOs are responsible for speaking up on societal issues, and their stance may influence their purchasing decision

As pointed out earlier, stakeholder mix is key to successful management. Too often, employees – essential company stakeholders – are out of the loop. C-suite used to look at them as a typical resource, with specific functions and defined deliverables. Top executives have already recognised that employees are the backbone of an organisation. Empirical data also evidence the increasing demand of employees to have more communication from their CEOs, including activism. Despite that, the effect of CEO activism on employees can be damaging. Employees who agree with a position expressed by a top manager publicly will continue working with the same attitude and enthusiasm. However, those who disagree will be doubtful in contributing to the company’s objective and mission.

To be or not to be, is no longer a question

CEOs are continuously exposed to global transformations and public opinion. People expect global brand leaders to represent them and solve their problems because governments fail to do that. They believe that CEOs are empowered to raise international concerns and move the societal agenda forward, as they are equipped with essential resources. Sitting calmly in shadows or choosing a defensive approach is not the best communication practice. CEOs have to speak up, build their communication on trust and authenticity, and involve all stakeholder groups in the dialogue.

Last but not least. Millennials will play a vital role in the future. CEO activism should be a long-term strategy aimed at millennials, who already make up half of the world workforce in various industries. Therefore, in pursuit of success, CEOs need to have a forward-thinking approach and understand the new generation, their beliefs and their preferred communication methods. Knowing this will allow creating a solid foundation for business development in the future.