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Markkula Center for Applied Ethics

The CEO and Political Speech: How Leaders Decide to Engage

Ann Skeet

AP Photo/Eric Risberg

Ann Skeet is the senior director of leadership ethics at the Markkula Center of Applied Ethics. Views are her own.

 

There’s been some handwringing recently, without much clear direction, for people in leadership positions navigating the landmines of commenting on social and political issues. It turns out that, depending on the stakeholders’ perspective adopted—a customer, client, shareholder, employee, neighbor—a lot of very complex issues can be gathered into any organization’s realm. How does the CEO respond? Perhaps the way to think about how a CEO should speak out is to think about why the leader is speaking at all.

The CEO can respond from a personal leadership stance or as leader of an organization. Those perspectives are not mutually exclusive but they can inform the thinking of someone grappling with decisions about political and social engagement. Consistent with our recommendations for making an ethical decision, each leader should tap into her own self-awareness and reflection abilities, identifying her motivations for engaging on political or social issues—the “why” informs the “if” and the “how”.

Personal Leadership

If the person occupying a formal, organizational leadership role speaks because she feels compelled to address societal or political concerns regardless of the consequence, she is adopting a personal leadership stance based on her desire to influence society. As part of this decision, the leader needs to be prepared to step down from her leadership position if her personal view and the responsibilities of her role conflict. While this might seem like an extreme starting point in the deliberation process, it reflects a tension people accept when they move into formal leadership positions.

By accepting a leadership role, one enters into a tacit contract to subordinate personal beliefs to the public duties of the role. The current chief justice of the Delaware Supreme Court, Leo Strine, Jr., lays out this reality and the deliberative processes he used to act in different ways relative to the death penalty depending on the role he was in at the time. He shares three examples in a thorough, well-written essay in the Widener Law Review[i], for readers interested in another voice on the topic. I refer to this obligation as “playing one’s position” and explore it in a Practice of Ethical Leadership model I have developed.

A person choosing this path—speaking out regardless of risk to incumbency in an organizational leadership role—is placing a higher value on civic/societal leadership and choosing to provide such leadership even at potential personal cost. Because the cost is personal, I think of this as personal leadership—a choice one is making for oneself.

Institutional Leadership

If a leader wants to speak on a topic from the perspective of serving as an organization’s leader, she should use the foundational documents in her organization to guide her and consider briefing her board—the mission statement, values and business strategy. For readers interested in learning more about how to use mission as a framework for ethical decision making, there is a resource on the Markkula Center for Applied Ethics website.

Bottoms-Up or “Top-Out”

Once a CEO has reflected on her motivations for engaging on an issue, she may find further discernment is needed to chart her course of action. Academics and industry leaders have been noting for the past several years the pressures CEOs face from millennials, both as employees and as customers, to engage in political issues. Market forces have been a force for ethics[ii] for some time. Silence, or a neutral stance, is not often a viable option.

The 2019 Edelman trust survey found that a record high of 71 percent of participants have the expectation that CEOs be leaders of change by speaking up and “responding to challenging times,” including “industry issues, political events, national crisis, and employee driven issues.”[iii]

When a CEO is feeling nudged into engagement by constituencies, or from “bottoms-up” pressures, they are responding largely as their organization’s chief strategist. Needs of the business are really driving the motivation for engagement in these instances, and often it gets written about as the company’s engagement and not the CEO’s. A recent, useful article on this kind of CEO engagement was written at Wharton by Dr. Caroline Kaeb and Ambassador David Scheffer, Bullhorns for Humanity: The Rise of CEOs as Social Activists. [iv] It accompanies a workshop report from the Chicago Council on Global Affairs about their leadership initiative on corporate engagement with public policy[v] outlining 16 principles companies can consider when engaging in social issues, three focused on human rights and the remainder on public policy issues. Dow CEO Jim Fitterling’s comments to Fortune magazine about his push for increased plastic recycling is an example of a leader engaging on an issue in response to momentum from constituents. When asked why he is spending so much of his time on the plastic challenge, Fitterling responded: “My millennials all want to solve this problem too. People my age want to solve it, too.” When asked whether his board approved of him spending so much time on the issue, he gave two thumbs up.[vi]

At other times, a leader adopts an institutional stance because she identifies it as important to do so in her role. I call this “top-out” leadership and in the Practice of Ethical Leadership describe this activity as an element of designing ethical systems. Leaders make these moves when they personally identify an issue for their country, industry, or society more broadly, that they feel they can contribute to as the leader of their organization. Black Rock CEO Larry Fink’s annual letters are a good example of this kind of engagement. He chooses to encourage companies that would like to be in BlackRock’s funds to meet certain societal criteria he believes are good for industry, such as care for the environment and board diversity. It is possible Fink received pressure from employees, customers, or his board. Regardless, his comments in this year’s letter are consistent with someone speaking from his own belief set and someone who understands his influence in the large ecosystem his business operates within.

“I wrote last year that every company needs a framework to navigate this difficult landscape, and that it must begin with a clear embodiment of your company’s purpose in your business model and corporate strategy. Purpose is not a mere tagline or marketing campaign; it is a company’s fundamental reason for being—what it does every day to create value for its stakeholders. Purpose is not the sole pursuit of profits but the animating force for achieving them.

Profits are in no way inconsistent with purpose—in fact, profits and purpose are inextricably linked. Profits are essential if a company is to effectively serve all of its stakeholders over time—not only shareholders, but also employees, customers, and communities. Similarly, when a company truly understands and expresses its purpose, it functions with the focus and strategic discipline that drive long-term profitability. Purpose unifies management, employees, and communities. It drives ethical behavior and creates an essential check on actions that go against the best interests of stakeholders. Purpose guides culture, provides a framework for consistent decision making, and, ultimately, helps sustain long-term financial returns for the shareholders of your company.”[vii]

This table provides a quick recap of the stances a leader can choose when considering political and social engagement and the implications of her choice.

Leadership Stance

Drivers

Most Significant Risk to

Personal Leadership

Conscience

Individual leader

Institutional Leadership

 

 

 Bottoms-Up

Constituent/Market pressures

Organization

 “Top-Out”

Conscience/Desire to drive social change

Organization and leader


The Board as a Resource for Engagement

Whether a leader chooses to brief the board before or after she acts likely has to do with her risk profile. If she wants to insure she is acting consistently with the organization’s purpose and goals, the board can be a great resource for collaborative thinking. (If she feels so strongly that she doesn’t care what the board thinks, then she’s really operating from the first perspective described above, personal leadership, and should be ready to accept consequences—even termination from her role.) Sometimes CEOs act without consulting the board because they are confident that the board will see the matter in a similar fashion. This is more likely in organizations where people regularly use mission and values to guide decision making. In those cases, it’s likely the board would expect the CEO to act without consulting them because such clarity of purpose and values is so critical to the organization’s success that the board hires leaders who will make decisions using that lens regularly.

Board members should pay attention when leaders struggle with decision-making in this era of heightened expectations for taking a stand on social and political issues. It may signal an executive whose moral judgement is not fully developed, someone wanting more guardrails around decision-making than frameworks. Depending on the role and the scope of the position, this can be a flag that an executive is underprepared or overwhelmed by certain aspects of the job. Boards are a vital resource in these instances, offering the CEO and the organization, more collective wisdom to draw upon.

It should not be surprising that people in formal leadership roles engage in social and political issues. People with innate leadership abilities and skillsets, as many CEOs are, will be drawn to lead.

 

 

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[i] Strine, Leo E., Duty & the Death Penalty (2015). Widener Law Review, Vol. 21, P. 1, 2015. Available at SSRIN: https://ssrn.com/abstract=2514329

[ii] Skeet, Ann, Market Forces Make a Case for Ethics in Governance, March 9, 2016, xCEO, inc. Volume 12, Issue 1

[iii] 2019 Edelman Trust Survey, https://www.edelman.com/trust-barometer

[iv] Kaeb, Dr. Caroline and Scheffer, Ambassador David, Bullhorns for Humanity: The Rise of CEOs as Social Activists, June 6, 2019, Knowledge@Wharton, The University of Pennsylvania

[v] Leadership Initiative on Corporate Enagement with Public Policy, March 11, 2019, The Chicago Council on Global Affairs, Dr. Caroline Kaeb and David Scheffer

[vi] Alan Murray, CEO Daily, Fortune, June 26, 2019, https://view.newsletters.fortune.com/?qs=a1454ddc5d3b16b1f74568e2f31c9e965fc8509d59e31c6490d47041a95fd659a7a7a4cb33bcff128506da600ad8622f1b08aae6de4fdbc8349e63fa2d385672bffb108eb317c538 

[vii] Larry Fink, Larry Fink’s 2019 Letter to CEOs, BlackRock corporate website

Jul 2, 2019

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