by Alison Taylor | Harvard Business Review
The May, 2024 edition of The Hub brings you an article from Harvard Business Review which highlights the emerging role of corporate in social issues and demands of employees on issues affecting their lives/society.
Today’s employees are far more likely than those of generations past to raise alarms about what businesses are (or aren’t) doing about climate change, racism, political conflicts, abortion, or gun control.
Corporate leaders have wound up embroiled in complex questions about whom they represent — and on what basis. The Business Roundtable and other influential voices have called on businesses to balance the interests of all their stakeholders, not just shareholders. Experts have told executives that employees and the general public want them to take public stands on social issues — and that doing so might confer an edge in hiring talent or attracting customers.
Companies are facing backlash around what they are or are not saying on issues such as ESG and DEI, with many hesitating to defend their choices, and sparking further employee frustration in the process.
How Did We Get Here?
Transparency has become a weapon:
Today the public crowdsources opinions on where to work and what to buy, and then skeptically compares them to corporations’ own claims. Threats from within pose perhaps the most challenging issue for corporate affairs teams, as employees seek to hold leaders accountable for ethical missteps. For example, employees organized protests and walkouts at Google over lucrative and secretive sexual harassment settlements. When Amazon announced a $10 billion investment to tackle climate change, employees broke confidentiality agreements to highlight the company’s ongoing work with oil and gas companies.
Business has become global and harder to control:
Globalization offers companies enormous growth opportunities and access to cheap labor and raw materials, and reduces oversight from various national legal and political institutions. But it also exposes them to a wider range of social and political risks.
Business has become enmeshed with politics and social issues:
In 2011 Occupy Wall Street, the Indignados Movement in Spain, and the Arab Spring are early examples of intersecting sociopolitical frustrations that drew business into their tailwinds.
The Uncomfortable New Landscape for Corporate Advocacy
To build and maintain cohesive organizational culture in a deeply polarized, broadly vocalized society, leaders must develop norms and processes that enable them to respond to ethical concerns and political issues before they blow up. These processes should give employees both agency and responsibility over when they choose to speak. And they should help organizations act proactively and strategically to ensure they can back up their public positions.
The time has come to rethink how organizations talk about and act on political, social, environmental, and cultural issues. The solution is to involve employees more effectively in determining corporate advocacy, while leaders exercise far more restraint in making promises and taking positions.
A New Speech Culture for a Vocal, Polarized World
To proceed with integrity on matters of corporate and employee speech, you must create a culture that’s attuned to the social challenges we face today, and you must be realistic about how your company can (or cannot) address them. It involves designing an organization where regular discussions among all employees about social priorities is anticipated; where ethical concerns are part of day-to-day work; where politics are considered a healthy part of discourse; and where everyone is attuned to how corporate choices impact human beings.
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(Note: IICA duly acknowledge the ownership / authorship of the article and republishing the same only for educational purpose of Independent Directors)
