President Donald Trump’s decision to cancel the Deferred Action for Childhood Arrivals program has already stirred up a lot of controversy in the business world, with many CEOs and other corporate leaders speaking out either personally or on behalf of their companies to express opposition to it. Washington Post columnist Jena McGregor hears from several leadership experts that this outcry is not surprising, because business leaders are not as concerned as they used to be about the administration retaliating against them for speaking out:
If anything, said Jeff Sonnenfeld, a senior associate dean at Yale School of Management, it’s becoming more of the norm to speak out against the administration’s policies than for CEOs to bite their tongue. “I think the fear has largely dissipated unless you’re a major government contractor,” he said. “The idea of bullying — that’s no longer creating fear of consumer backlash. It’s almost becoming a badge of honor.”
We might even take it one step further: At a time when corporate activism is on the rise and most American millennials expect CEOs to be actively engaged on social issues, there is actually a risk involved in not taking a stand, especially when that stand accords with what many of your employees and customers believe. As we’ve seen in other recent controversies like the violence in Charlottesville, Virginia, CEOs are taking on much larger portfolios as public figures today than perhaps ever before.
If public pressure is one force compelling corporate leaders to play activist roles, however, another major factor is the workforce: Employees and candidates, especially the vast cohort of millennials, are pushing their bosses to speak and act on the values most of them believe in. The tech sector’s opposition to the Trump administration’s immigration policies, for example, has been guided in large part by activism among its employees, many of whom are themselves immigrants or the children of immigrants.
On Tuesday, US President Donald Trump ordered the cancellation of DACA, a program put in place by his predecessor Barack Obama that effectively shielded young undocumented immigrants who arrived in the United States as children from deportation. The Deferred Action for Childhood Arrivals program, which is based on the principle of prosecutorial discretion, was enacted in 2012 and has benefited some 800,000 individuals under 31 whose parents brought them into the country illegally before the age of 16, and had lived in the US continuously since 2007 and were in school or had graduated (though in total, 1.1 million may have been eligible for the program). DACA did not grant these immigrants US citizenship or permanent residency—only an act of Congress can do that—but made them a non-priority for immigration law enforcement and offered them renewable two-year work permits.
Trump and other critics of DACA have long maintained that it constituted an overreach of President Obama’s executive authority. Trump’s order gives Congress six months to enact a legislative alternative to protect the so-called “Dreamers” covered by DACA, after which time the administration will begin phasing out its protections. What that phase-out will look like is unclear: Trump has said he would “revisit this issue” at that time, creating massive uncertainty regarding the future direction of this policy if Congress fails to act.
Trump’s decision to end DACA has drawn swift and strong condemnation from the same set of American business leaders who have voiced criticism of the president’s other immigration policies. Last week, the pro-immigration reform business organization FWD.us issued an open letter to Trump and Congressional leaders, signed by hundreds of CEOs, calling on Trump not to end DACA and on Congress to act to give the Dreamers permanent legal status:
Merck CEO Kenneth Frazier and President Trump (Screencap/White House YouTube)
Over the course of three days, five US business leaders, including the CEOs of Merck, Under Armour, Intel, and 3M, plus the president of the Alliance for American Manufacturing, have resigned from President Donald Trump’s American Manufacturing Council, amid backlash over the president’s response to the violence that took place at a gathering of white supremacists in Charlottesville, Virginia over the weekend. Two AFL-CIO officials have also left the council, and the CEOs of PepsiCo and Campbell Soup Co. are also under pressure from activists to do so. [Update: On Wednesday afternoon, the CEOs on both the American Manufacturing Council and the Strategic and Policy Forum decided to disband the groups.]
Trump has faced extensive criticism for declining to specifically denounce white supremacism in his initial remarks on the violence and waiting until Monday to do so. On Monday, Merck CEO Kenneth Frazier appeared to echo that criticism in his statement announcing his resignation from the council, writing: “America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy.” From an HR and management perspective, these high-profile resignations illustrate how high the stakes have become for American CEOs at a time when millennial employees and customers increasingly expect them to take on an activist role in the social and political issues of the day.
Over the past 18 months or so, a growing number of companies have started to push their HR strategies into their broader consumer brands in a bid to attract and retain customers as well as talent. In this “HR as PR” strategy, businesses adopt progressive benefits, for example, or take strong positions on diversity and inclusion as a way to show that they care about their employees and thereby to encourage consumers to patronize them. We’ve seen quite a few examples of this recently, from Lyft advertisements suggesting it treats its drivers better than Uber does, to Chobani CEO Hamdi Ulukaya’s high-profile efforts to hire refugees from Syria and other troubled countries, and the evidence, while limited so far, suggests that this strategy is effective at generating revenue.
Since Trump’s election last November, HR as PR has taken on a new dimension as the CEOs of corporate America find themselves increasingly called upon to take stances on a variety of social issues ranging from immigrants to LGBTQ rights, from racial tensions to women’s rights. While these decisions have been bold and courted criticism, they have not been fraught with potentially massive blowback—until now.
As public figures, CEOs and other top executives of major companies wield influence beyond the realm of business: Their public statements are carried in the press, politicians answer their phone calls, and their views on social, political, and global affairs carry uncommon weight. In the past year, we’ve seen CEOs of large US companies take public stances and put pressure on political leaders regarding a number of controversial issues, including most notably immigration and transgender rights.
Not long ago, CEO activism was generally seen as a liability, a way of alienating customers and employees who don’t share the chief executive’s political views. However, a new report from Weber Shandwick and KRC Research finds that attitudes toward politically engaged CEO are changing, thanks to millennials feeling increasingly positive about CEO activism. Washington Post columnist Jena McGregor delves into the report’s illuminating findings:
Millennials are the one group that sees this trend in a significantly positive way. In the survey, 56 percent of millennials said CEOs and other business leaders need to engage on hotly debated current issues more today than in the past, compared with just 36 percent of Gen Xers and 35 percent of baby boomers. Forty-seven percent of millennials said CEOs have a responsibility to speak up on social issues that are important to society, compared with just 28 percent of Americans in older generations. And millennials were the only generation in the survey in which the percentage of those who said they view CEOs more favorably for taking public positions actually expanded since last year, rather than declined.