Last year, Australia held a referendum called ‘The Voice’ on a constitutional amendment to create a separate political body representing indigenous views.
A number of corporate leaders waded in on the issue in public debate leading the Australian government to suggest that business leaders should ‘stick to their knitting’ and not get embroiled in such issues.
On a recent visit to Australia, I was asked for my views as to whether business leaders should, indeed, get involved in such debates or not.
My response was that it’s not my place to tell anyone what to do but that there are questions leaders should consider when making such decisions.
The first question to be addressed is: what does this have to do with my business?
Clearly, political debate about indigenous rights raises questions for business as to whether their employment and compensation patterns in any way discriminate against indigenous people. Or whether their business practices are conducted with due respect to such rights on indigenous lands and so forth. In other words, the first task is to look inwards. Get your own house in order before speaking out.
Yet it is hard to argue that, for most businesses, what is a purely political and constitutional question regarding political representation has anything to do with one’s business. One can expect companies like Patagonia to express a view on environmental issues. Or Hobby Lobby to defend Christian values. For these businesses, such issues are an integral part of their brand identity. They’re not jumping on a temporary bandwagon or talking about political issues that have nothing to do with their business.
Once we get past that first question, mostly with a lot of bluster, we usually end up with the statement that ‘we have to declare our values.’
OK. When executives say ‘our values’ what do they mean?
Are they the values of the CEO and the executive team? Because, if so, then we need to remember that an executive team is not the company. It is a group of individuals entrusted temporarily with the stewardship of the company. They have no business using corporate resources to impose their own personal values unless, as in the examples above, they are a critical part of the company’s brand value.
If not the executive team’s values, then whose? Shareholders? Well, for a public company – good luck with believing that hundreds of thousands of globally scattered shareholders have any kind of uniformity of values.
Maybe employees’ values? In most companies, employees tend to reflect the general voting population. Just like the electorate, they have a range of views on most issues. Any executive team that comes down one way or the other on purely political issues will alienate many of its own employees (the Voice idea was voted down 60:40 in the referendum suggesting that around 60 percent of any random group of employees might disagree with a CEO taking a pro-Voice stance).
In many instances, companies feel forced to ‘take a stand’ on some issues under pressure from activist groups. This needs to be handled with care.
The first thing we should recognise is that activists care nothing about your business. They care about their cause. Their only interest in your business is in recruiting its resources in support of The Cause.
Second, most activists are single issue focused. Unlike business leaders, they do not have to balance multiple competing priorities and demands. They can afford to take the most zealous positions without worrying about balance or about stakeholders who may have different views.
It is also worth bearing in mind that activists can never be satisfied. Whatever one does, they will always ask for more. When they don’t get it (because they never can), they will microscopically examine your business and attack any perceived failings. Which gets us back to the previous point – get your own house in order before speaking out.
Management becoming submissive to the loudest and most disruptive voices is not leadership. It is the opposite.
Senior business leaders should ask themselves another question – and be honest about the answer.
Do we have the skills to engage in what are purely political debates?
These are not skills that have been taught in business schools. They are not skills that have been honed over the years and decades by businesspeople rightly focused on running their business successfully. To a few it may come naturally. To most it does not.
In my experience, if push comes to shove, politicians will run rings around business leaders in political debate. For every business leader who has seen success in the political space, there is a graveyard full of those who have tried and failed miserably.
Maybe that’s what the Australian government was diplomatically trying to point out when it suggested that business leaders should stick to their knitting.
Finally, for those who care about it, we should also consider the impact of such actions on democratic legitimacy.
Nobody elected business leaders to political office. As individuals in a democracy, they are citizens just like the rest of us – no more, no less. If we move to a position where individuals who are privileged to be in a position to commandeer corporate resources do so to push their own preferred political positions, then we are one step further away from a democracy to a plutocracy.
As I said at the start, none of this is intended to be prescriptive as to whether business leaders should take a stand on political issues or when to do so. Just that doing so needs careful consideration and a comprehensive internal process that asks the right questions and answers them honestly.
Speak out if you need to, but the bar for doing so may be much higher than some seem to believe.
This post first appeared on Joe’s ‘Random Thoughts‘ newsletter on LinkedIn.
