Social Concerns of Concern to Business

12 Oct, 2016


Social Concerns of Concern to Business

Last May, the American Counseling Association (ACA) decided to move its 2017 convention from Nashville to San Francisco. The move was to protest Tennessee’s “therapist bill” allowing counselors to refuse to help gay, lesbian and transgender clients.

Even now, more than eight months later, the 56,000-member organization’s top executive receives words of encouragement from other executives. “They still come up to me at conferences to tell me they support what we’ve done,” says Richard Yep, ACA’s executive director and CEO.

This decision cost ACA $750,000, “so it wasn’t an easy one to make,” Yep says. “Some board members wanted to keep the convention in Nashville but do something else to register our opposition — hold a rally, for example. But the board as a whole decided to take the more costly decision, which overwhelmingly reflected ACA’s membership’s convictions as well.”

‘The Age of the Activist CEO’

We may have entered what author Jeanne Meister calls the “Age of the Activist CEO,” but Yep doesn’t see himself in the same category as Facebook’s Mark Zuckerberg, Apple’s Tim Cook, Starbucks’ Howard Schultz or Salesforce’s Marc Benioff.

“I’m certainly not young like Zuckerberg, and while I felt very strongly about the Tennessee law, I work for our board and for our membership. They’re the ones that drove this decision,” Yep says. “It is simply against ACA’s Code of Ethics to deny counseling services to anyone — especially those most in need of them.”

For ACA, its members’ clients are their customers. That’s why, for ACA, what might once have been viewed as a “social issue” is a “business issue,” too. More and more, this is the case with a growing number of societal challenges, such as racial and gender discrimination, sustainability, human rights and educational quality. Pressure on companies to take a stand on such issues is increasing, and it’s coming from customers and employees or, in the case of professional associations, from members.

Public concern about discrimination is borne out by the Council’s 2016 Public Affairs Pulse survey of 1,000 Americans, conducted in September by Public Opinion Strategies. Nearly 74 percent of Americans, for example, believe racial discrimination is a “serious” problem, and a similar percentage (67%) say gender identity discrimination is also a “serious” problem. (The latter is defined as discrimination against transgender individuals.)

Public Demand

“It’s tempting to see this shift as a response to the personal beliefs of the CEO, but that leaves out the extent to which consumers and employees are demanding that corporations and professional associations take strong stands on these issues,” says Meister, the author of The 2020 Workplace: How Innovative Companies Attract, Develop & Keep Tomorrow’s Employees Today.

“I think the shift is generational in the sense that Millennials want to work for organizations that take the lead on these issues, and in 2015, they became the largest generational cohort in the country,” Meister says. “But in fact, Millennials are simply giving voice to the changes we all want, whether it is pay equivalency and other efforts to root out discrimination.”

Unfortunately, while the public may want corporations to take the lead in creating a more equitable society, companies don’t necessarily receive credit for what they’re already doing. “Unless they really dig deep, people don’t really know what role the CEOs play in these areas, much less what efforts are being made by companies whose leaders are not celebrities,” Meister says.

Moving the Needle

To take one well-publicized example, a growing list of companies have protested North Carolina’s law eliminating LGBT anti-discrimination protections and requiring that people in government buildings may only use restroom and changing facilities that correspond to the sex on their birth certificate. But it’s not clear if these corporate protests have made a significant difference in terms of the public’s recognition of the effectiveness of such efforts.

The Council’s Public Affairs Pulse survey shows, for example, that nearly half of Americans (46%) say the steps businesses have taken to reduce gender identity discrimination have had no impact. Using another example, a slightly larger number (47%) say years of corporate actions to combat racial discrimination have made no difference.

But whether or not the public appreciates these efforts, there’s no sign that companies are ready to call off such initiatives. Another recent Council study, Taking a Stand: How Corporations Speak Out on Social Issues, found that major corporations are facing mounting pressure to get involved in these matters — especially from inside their organizations (senior management and employees) and from customers.

That study of 92 public affairs executives showed companies are active on multiple fronts. Seventy-four percent have been involved recently in efforts to protect the environment. And, over the last three years, firms have worked to end discrimination based on many factors, including sexual orientation (59%), gender (54%), gender identity (52%) and race (50%). In addition, more than half (59%) of the companies have tried to improve access to quality education and 49 percent have been engaged in campaigns to protect human rights abroad.

Active for Decades

Some companies have been involved in social issue advocacy for decades. AT&T, for example, has been involved since 1962 in support of Vice President Lyndon Johnson’s “Plan for Progress” to end racial discrimination in hiring.

“At the time, AT&T was the largest company in America and many workplaces were segregated,” according to a company statement. “AT&T worked to establish a non-segregated workplace in each state. We also communicated that minority employees would receive equal consideration for promotions and ensured they’d qualify by providing on-the-job training and educational programs.”

A supporter of the Human Rights Campaign, AT&T in 2014 worked with the National Gay & Lesbian Chamber of Commerce to help pass a law in California requiring public utilities to extend contracting opportunities to LGBT businesses and in 2015 signed an amicus brief before the Supreme Court in favor of marriage equality.

The range of activities in which corporations are engaged is noteworthy. Raleigh-based PepsiCo joined hundreds of other companies in denouncing the North Carolina “bathroom bill.” Twitter has endorsed Black Lives Matter. Amazon and Johnson & Johnson have taken the White House “Equal Pay Pledge.” In July, Airbnb hired former U.S. Attorney General Eric Holder to develop a program for eliminating “explicit racism and implicit biases.” Many have joined coalitions; lobbied at the federal, state and local levels; issued public statements and press releases; and signed petitions.

“Employees expect the companies they work for to take a strong stand, and it is important for attracting and retaining talent. It’s just seen as part of the way we’ll do business in the 21st century.”

Business Benefits

“More and more, organizations are recognizing the business benefits of these forms of advocacy,” Meister says. “Employees these days expect the companies they work for to take a strong stand, and doing so is important for attracting and retaining talent. It’s just seen as part of the way we’ll do business in the 21st century.

“This is not only a response to the personal values of an outspoken CEO, especially when the issue is something like pay equivalency and workplace flexibility. Today, it is generally recognized that people have lives beyond the eight hours they are expected to be working for the company — whether they work at the office, at home or a client’s headquarters — and they have values that must be taken seriously.”

Galvanizing the Organization

Starbucks’ Schultz understands the distinction between his own values and those of the company, but says they do not conflict.

“I have a fiduciary responsibility beyond my own political views,” he said in a recent Inc. article. “But I do believe that the rules of engagement for a public company have changed, and there’s an opportunity for businesses to demonstrate a role in society that’s beyond profitability and shareholder value. We yield on the side of making our people proud. It galvanizes our organization.”

ACA’s Yep expects social issue activism to continue, in part because it reflects shifts in the way business is conducted. “I think it has a lot to do with the level of engagement a company seeks to establish with its customers,” he says. “Back in the days of Henry Ford’s Model T, the company made a product and said, ‘Here it is, the way we designed it, take it or leave it.’

“But today you can go to Nike’s website, design your own shoe, and they make it for you, to your specifications. That’s an indicator of the way, in today’s business world, we’re building relationships on deeper and deeper levels. We have to be increasingly responsive to others’ values, including all the stakeholders — boards, employees and customers.

“What I find so encouraging about this trend is how Boomer-age executives like me are welcoming these changes. There are real opportunities here, and I expect this trend to accelerate.”

Additional Resources

Taking a Stand: How Corporations Speak Out on Social Issues
2016 Public Affairs Pulse survey