When politics and leadership collide

Managing Partner, Philippa Sturt comments for Raconteur insisting that “profit is no longer king”. 

The old adage, ‘a principle is not a principle until it costs you something’, has never been more relevant. So, what happens when the ‘right’ decision hits the bottom line or impacts a business? It’s a question CEOs are increasingly having to answer.

When Facebook and Twitter accused the Chinese government of spreading disinformation about the pro-democracy protests in Hong Kong, they made an ethical stand against social injustice.

In August the social media giants removed thousands of state-backed accounts that sought to discredit protestors as violent and extreme, and were “deliberately attempting to sow political discord in Hong Kong”, according to a statement from Twitter.

For Twitter at least, the decision was seemingly an easy one to make. Not only did China’s campaign violate its policies of spam and fake activity, Twitter is blocked in the communist state – many of the accounts accessed Twitter using VPNs – giving the platform the freedom to take whatever action it sought necessary to crack down on illicit activity.

But would that decision have been as simple if, for instance, the illicit activity had originated from a political party in the United States, where the result of making a stand against a government may have more serious corporate ramifications? Perhaps not.

The platform already has a complicated relationship with Donald Trump, whose tweets often violate its terms of service – notably the parts about abusive, threatening and violence-promoting content. Would banning him, as so many have demanded over the years, result in retaliation from the president, who is known to wage personal attacks on companies that publicly challenge him?

Of course, this is only a hypothetical scenario – Twitter could have banned president Trump by now, if it wanted to – but the delicate balance between doing what’s ‘right’ and what’s good for business is a line that is becoming increasingly difficult to toe.

Ethical leaders must take action

When it comes to social injustice, business leaders can no longer watch from the sidelines. At a time of such geopolitical volatility and social unrest, there is an expectation to take action, not only from their employees, but their customers, investors and wider society.

“Ethical decision-making is what sets leaders apart – the CEO that leads, versus the CEO who succumbs to adopting the path of least resistance,” says Rita Trehan, business transformation expert and founder of Dare Worldwide Consultancy.

There is no shortage of examples when it comes to companies taking a public view on heavily politicised issues, such as Airbnb and Starbucks, whose leaders publicly condemned Donald Trump’s travel ban against seven majority-Muslim countries in 2017.

“Trump’s own history of making personal attacks on businesses made it difficult for brands to react to, many of whose globally-minded leaders were personally outraged,” says Giles Gibbons, a founding partner and CEO of strategy consultancy Good Business.

Despite the risk of backlash, Airbnb responded by offering free accommodation to anyone affected by the ban, and Starbucks offered free legal advice to employees and promised to hire 10,000 refugees over the following five years. While lauded by many, the moves were also met with threats to the business – #boycottAirbnb and #boycottStarbucks both trended on Twitter – along with attacks from a number of right-wing commentators.

“In many ways, however, this served to make the statements more meaningful. It felt like a genuine demonstration of audacity by business leaders and it showed a willingness to stand up and be counted for a hard-held set of values and beliefs,” Mr Gibbons says.

Profit is no longer king

After all, business leaders’ sense of social conscience has never been greater, and “profit is no longer king”, according to Philippa Sturt, managing partner at law firm Joelson.

She highlights Nike as a key example of a brand embracing this change, following the brand’s ads last year featuring American footballer and activist Colin Kaepernick, who controversially left the NFL after refusing to stand for the pre-game national anthem in a protest against social injustice and police brutality. The ad read: “Believe in something, even if it means sacrificing everything”.

“By embracing Kaepernick, Nike have elected to take both a social and political stance, knowing full well it may isolate a considerable portion of their US consumer base,” Ms Sturt says.

Even then, Nike’s stance is still complicated, following its move to extend the deal as the NFL’s official uniform supplier to 2028.

Dr Simon Hayward, CEO of leadership consultancy Cirrus and honorary professor at Alliance Manchester Business School, says authenticity and values are all a part of being a business leader in today’s world, and society now demands employers to have a “higher code of ethics than simple commercial self-interest”.

He says: “In recent years we have witnessed a breakdown of trust in organisations following many high-profile cases of mis-selling, mis-reporting and corruption. In some cases, the consequences have run into billions of pounds in damages and stock market value write-downs. Corporate amorality is a costly business.”

Read the full article at Raconteur online.