In this NACD BoardTalk post: “Business and Politics: When Should Companies Take a Public Position?”, Sidley Austin senior counsel and chair emeritus of the executive committee, Thomas Cole, offers a list of questions boards and CEOs should consider to guide their decision making as to whether to speak out on political and social issues. As a matter of best practice, the post advises CEOs/company leadership to speak out on such issues only after consulting with the board and carefully weighing the costs and benefits, with the understanding that taking a stance on a controversial issue may likely alienate certain constituencies while pleasing others. Among the key considerations is determining whether taking a position on the issue at hand is in shareholders’ long-term interests.
Relatedly, in “Corporate Political Involvement” (Directors & Boards), corporate governance veteran Charles Elson explains why he believes companies should avoid taking a stance on social and political issues and remain focused on their corporate purpose, which – unlike many controversial societal issues that engender diverse and divergent employee and other stakeholder viewpoints – promotes alignment in pursuit of common business goals that (among other things) supports investors’ willingness to contribute their capital.
See “Tech companies are blazing a trail by keeping politics out of workplace” (NY Post); our recent report: “Whether & How to Engage on Political & Social Issues”; and additional resources on our Activism page »CEO.
This post first appeared in the weekly Society Alert!