Over the past five years, a growing number of companies have faced increasing stakeholder demands to weigh in on an expanding number of ESG, political and cultural matters, from climate change to LGBTQ rights to the #MeToo movement. Today, companies are routinely pressed to go even further and advocate for or against specific issues and legislation, from Derek Chauvin’s conviction and voting eligibility laws to DE&I matters and frequent mass shootings.
Indeed, companies large and small are struggling with this pressure, given the significant risk advocating on such complex, hot-button issues carries for their reputations and their bottom lines. In an era of protests, boycotts and activism, executives face the potential loss of current and future customers, employees, suppliers, shareholders and — especially when weighing in on politically sensitive matters — the wrath of elected officials. Against this backdrop, even silence can alienate certain stakeholders.
So, what should companies do?
It’s more important than ever for executives to stay on top of current events and identify emerging trends. To fill in any gaps, they also should seek to understand the mindsets of employees, customers, investors, partners, policymakers and other constituents. Do your workers skew younger and, thus, are they more inclined to pressure management through social media? Are your customers working parents who may have strong opinions about supporting only companies with generous paid leave policies? Do your investors factor climate change into their risk calculations and, therefore, want to see substantive action on the issue? Close relationships with and surveys of each stakeholder group can help provide clues about whether a company will have to decide whether to take a position – or whether it can probably take a pass.
Anticipate and Prepare
Develop a constantly updated list of most-likely-to-be-asked-about topics. Determine which stakeholder groups are most likely to speak out about each matter. Examine each issue itself, relying on subject matter experts to provide a 360-degree view, constantly gauge whether an issue may grow in importance among stakeholders and determine who will have decision-making authority.
From there, establish criteria to evaluate whether to engage, including asking:
- Is this issue consistent with the company’s core values, mission, code of conduct and/or workplace policy?
- Has the company previously expressed support or opposition to the issue or a similar one?
- Does the issue have direct or indirect business implications because of operations or workforce locations?
- Do stakeholders have a vested interest in the issue or its outcome?
- Will the company be the first – or first in the sector to weigh in – or is it joining a pack of peers?
- Is the issue newly emerging or at the preliminary stages, such as a bill introduction?
- What are the direct or indirect risks of taking a position?
Finally, plan. Use the top issues list and the evaluation criteria to develop written scenario plans for each subject. This can be a simple list of important questions that management should ask itself to fully understand the ramifications of advocating one way or another. Executives need a strategic framework to address these issues before they arise — and before a company faces the intense pressure to act in the moment.
If leaders choose to take a position on an issue, decide:
- What to say: To be credible, a statement must be authentic, rooted in not just what a company stands for but also in how it behaves. The viewpoint must be consistent with past views, even if they weren’t public, and compassionate, given that many of these issues are personal.
- How to say it: The information delivery tactic suggests the issue’s importance. A CEO statement, or a corporate tweet? Wait until the media asks or issue a press release? Be the voice or ask the industry trade association to lead? Stakeholder outreach plans always are advisable.
- When to say it: Timing can be critical. Being seen as too quick to act or too slow to move can have unintended consequences. Determine what’s best for the organization. Having a plan to move quickly, if desired, makes the decision-making easier.
Finally, develop a follow-up strategy. Engagement doesn’t end with a statement; employees, customers, investors, partners, policymakers and others may have questions or feedback. It’s important to be responsive and identify improvement areas.
Of course, not everything can be studied and planned. Executives could face any number of unexpected topics. But those companies that have taken the time to be thoughtful today will be better able to quickly evaluate the issues of tomorrow and determine the best course of action.