The Activist Company

Posted by Flux on 

17 December 2019

What’s trending now?
Corporate activism is defined as a public stance taken by a company which aims to positively impact social change or legislation. In the ‘woke’ era many brands have become vocal on matters of social injustice, racism and diversity and inclusivity in the workplace. To do so, they have turned to concepts such as brand activism and morality marketing. However corporate activism goes beyond marketing campaigns.

Organisations are functional because internally, people attend to the nuts and bolts to make things work. These same people make up the body of an activist corporation. The activist CEO and employee both play a role in focusing attention on the socio-political issues pertinent to their consumers – and indeed the workforce.

The CEO Activist is a senior leader who is vocal about social issues not directly related to the company’s bottom line. While Employee Activists speak through traditional or social media to voice their views on social issues and even on the actions of their employer.

Why it’s important
Company activism is no longer isolated to the CSR (Corporate Social Responsibility) back office or ethics department. It’s now accepted that corporate activism should be a central feature of a company, led by the CEO and in many cases backed by employees.

As far as the boss is concerned, Weber Shandwick’s CEO Activism in 2017 report reveals that in the US almost 50% of millennials believe the leader of a company should take action on social issues such as race, gender and immigration. A global study, the Edelman Trust Barometer Expectations CEO 2018 report, backs up these findings. 64% of respondents of various ages stated that they expect CEOs to be at the forefront of social change, especially when the government is not taking the lead.

‘Society is demanding that companies, both public and private, serve a social purpose.’
Larry Fink – Chairman and CEO, Black Rock Investment Company

As for employees, banding together is nothing new. Trade unions are the traditional bridge between the two parties, a mechanism for employees to express their grievances. However the employee activist is now shifting this narrative in a number of ways. Firstly employee activists are speaking out on social issues, as opposed to exclusively focusing on employment matters. Secondly, many are choosing to collectively criticise their employer over action it has taken – or not taken. This usually follows after they have engaged unsuccessfully with the company over a specific matter.

Millennials and Generation Zs expect the brands they buy from or work for to take into account the impact and influence the company has on society and on the environment. In their eyes, it’s no longer simply about making a profit. According to research by management consultancy Povaddo, 40% of employees from Fortune 100 companies in the US stated that its employer’s actions on vital social issues has an impact on their decision to work for that business. 29% stated that they would most likely not continue to work for their organisation in the long term if it failed to make a difference on social matters.

What’s the butterfly effect?
Led largely by American executives, activist CEOs believe that they can and should serve their communities by adding their voices to global conversations on topics such as climate change, immigration and LGBT rights. Head of pharmeceutical company Merck, Kenneth Frazier resigned from Donald Trump’s Business Advisory Council, as a stand against the US President’s failure to condemn the neo-Nazi protest in Charlottesville in 2017. After Frazier’s resignation other CEOs on the council followed suit, leading to the body being disbanded.

Some CEOs are taking into account the impact and influence the items or services they offer have on society. Ed Stack, CEO of Dick’s Sporting Goods removed all assault style guns from the company’s stores , banned the sale of high capacity magazines and raised the minimum age of gun buyers to 21 in all US states. Stack did this in response to the 2018 Parkland School shooting. He has also become a vocal advocate of companies taking a stand on gun control.

Employees are also playing their part. In August 2019 workers at Walmart staged a walkout in protest against the company selling guns. This followed a mass shooting in one of the stores. Walmart later announced that it would no longer sell ammunition for short barrel rifles and handguns. It also asked customers to refrain from bringing guns into its stores.

Employees of US e-commerce company Wayfair staged a walkout at its headquarters in Boston. They were protesting about the sale of furniture to migration detention centres.

In much the same way that activist investors operate, Amazon employees used their shares to voice their disapproval at the company’s lack of action on climate change. Employees of tech giants Amazon, Salesforce, Google and Microsoft took their respective companies to task over deals with US government agencies like Immigration and Customs Enforcement ( ICE) over the manner in which they deal with immigration.

The Pioneers
Software company Salesforce’s Marc Benioff is widely regarded as a trailblazer in the new era of CEO activism. Benioff has urged other senior leaders to take a stand on homelessness, along with polarising issues such as gay rights, climate change and gun control. He is quoted as saying ‘CEO activism is not a leadership choice but a modern and evolving expectation’.

Some leaders are not just lending their voices to social issues but forming organisations to push specific causes. Among them, are Catalyst CEO, a group of over 60 CEOs who pledge to advance women into senior positions, and Open to All , a campaign to promote businesses that welcome employees and customers regardless of their race, gender identity, disability or religion.

In 2019 the Business Roundtable ( BRT) in the US revised its mission statement, from generating profits and keeping shareholders happy, to a focus on societal responsibilities.

Julia Kanouse, CEO at the Illinois Technology Association (who has just stepped down from that position) puts it this way: ‘Today in a digital world, your worth is your people… You have to put more emphasis on keeping them happy and pay attention to issues they care about.’

Global Hotspots
The U.S.

By Khumo Theko
About Khumo

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Image credit: Clem Onojeghuo

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