In “When a company takes a stand, what is the board’s role?”, PwC’s Paul DeNicola soundly advises companies develop a framework to help facilitate the board’s oversight of risks associated with management speaking out on political and social issues. With investors and other stakeholders increasingly identifying potential misalignments between companies’ political activities (e.g., spending/contributions, lobbying, participation in advocacy groups) and their public pronouncements, the reputational and business risks associated with a misstep are expanding.
Suggested framework components include identifying decision-makers and authorized spokespersons and specifying how and when to consult the board. Importantly, the board should address this topic proactively before an incident occurs that may adversely impact the company.
See “When should CEOs speak out on public issues?” (Fortune), last week’s report: “CEO/Leadership “Activism” Guidance” and additional resources on our Activism page »CEO.
This post first appeared in the weekly Society Alert!