CEOs Disband White House Business Councils in Wake of Charlottesville

CEOs Disband White House Business Councils in Wake of Charlottesville

Underscoring the increasingly central role CEOs of major US companies are playing in the country’s public and political debates, a number of business leaders abandoned President Donald Trump’s American Manufacturing Council this week in response to the president’s remarks regarding violence that occurred at a white supremacist rally in Charlottesville, Virginia last weekend. Ultimately, according to the Wall Street Journal, members of both councils decided to disband—although Trump later claimed on Twitter that it was his decision:

On a 45-minute conference call that started around 11:30 a.m. ET Wednesday, members of the President’s Strategic and Policy Forum decided to dissolve the group. Blackstone Group LP chief Stephen A. Schwarzman, who organized the conference call, called the White House and spoke with Jared Kushner, Mr. Trump’s son-in-law and a presidential adviser, to give him the news, according to a person familiar with the call. Around the same time, the manufacturing council also had a call and decided to disband. …

“It became clear very quickly that there was a consensus” to disband the group in total, one participant said. “It was important that it be addressed as a group and not a drip-drip.”

The CEOs have taken care to frame their departures from the councils as something other than partisan political opposition to the president or unwillingness to work with his administration, as IBM chief Ginni Rometty did in a communication to her employees:

We have worked with every U.S. president since Woodrow Wilson. We are determinedly non-partisan – we maintain no political action committee. And we have always believed that dialogue is critical to progress; that is why I joined the President’s Forum earlier this year. But this group can no longer serve the purpose for which it was formed.

Left unsaid in such communiqués is that for these CEOs and their companies, their association with Trump has increasingly become a public relations liability. The Journal notes that executives were facing pressure to distance themselves from the White House from their employees, particularly younger employees, as well as from activist groups and social-media campaigns. On Tuesday, Washington Post columnist Jena McGregor took a look at why so many executives were re-evaluating their relationships with the president:

“A lot of them went onto [the councils] thinking this is a pro-business president and we have an opportunity to influence what’s going on,” said Bill George, the former CEO of Medtronic and a professor at Harvard Business School. “Now, for many of them, the actions Trump is taking violate core principles that not only their companies, but they themselves, have.” …

The debate about CEOs and Trump’s councils flared online in recent days as some tweeted lists of which CEOs had departed, directly appealed to corporate Twitter accounts for their CEOs to leave, or shared the hashtag #QuittheCouncil, a campaign by the online civil rights organization Color for Change. That hashtag accrued more than 28 million impressions over the past two days, according to data from the analytics firm Brandwatch.

These social pressures have prompted business leaders, particularly in the tech sector, to take stands on several hot-button social issues in the past year, often in opposition to the Trump administration: A number of high-profile CEOs, for example, registered their opposition to Trump’s “travel ban” order earlier this year to freeze the admission of refugees and travelers from several Muslim countries, in some cases as part of a more critique of the administration’s approach to immigration policy. May of these same CEOs have stood up for the rights of transgender Americans, voicing criticism of policies like Texas’s controversial “bathroom bill” and Trump’s proposal to ban transgender people from serving in the military.

As Greg Ip observes in an op-ed at the Journal, in today’s political environment, CEOs clearly see a greater risk in remaining silent about these issues than in voicing opinions that may alienate some employees or customers who don’t share them:

On politics, business leaders are risk-averse. They prioritize stability and the status quo. What has changed is the definition of the status quo. Gay and transgender rights, and action on climate change, were once liberal causes. They are now largely mainstream, particularly in big cities that are home to corporate head offices and the educated workers they covet. Businesses have adapted their own plans, policies and attitudes to this new mainstream. White supremacy, of course, has long been rejected across the political spectrum, but for some companies, merely being associated with a president who didn’t clearly condemn it poses risks.