Boards must establish a Framework: When Company takes a Dig on Social & Policy Issues
Companies and boards of directors have been under pressure in recent years from their constituents -employees, customers, investors, and the communities in which they operate — to take a public stance on high-profile political and social movements. But it is impossible and impractical for companies and executives to speak out on every issue. When a company or its executives’ express opinions on social issues, they risk making comparisons with their efforts to achieve policy outcomes that have a direct impact on their business. With just one wrong comment, a company's stakeholders may perceive it negatively, leading to consumer boycotts, lost business opportunities, or serious damage to its brand and reputation. There is a lot more at stake here than just a few bad headlines.
Therefore, the issue is for companies and CEOs when they should speak up. So, whenever the CEO or other senior executives makes a public statement on a sensitive topic, it is a good idea to ask if the board should be involved. It is preferable to establish a framework rather than answering the issue on a case-to-case basis.
