By Brent Goldfarb
September 7, 2017

President Donald Trump’s equivocations on the violence in Charlottesville led business leaders to publicly rebuke the president and caused the dissolution of two of his business advisory councils, but these moves had no discernible effect on policy or the president’s support in Congress. Perhaps learning from this, business leaders last week took preemptive action, issuing an open letter urging Trump to keep in place the Deferred Action for Childhood Arrivals (DACA) program, which protects from deportation immigrants who were brought to the U.S. as children, also known as Dreamers.

But this letter still failed to stop the president, who announced DACA’s cancelation just a few days later. Trump’s decision indicates that the CEOs’ movement from reactive to proactive tactics couldn’t sway him. Perhaps it is now time for them to rethink whether their public statements or open letters can change the policies of a president whose electoral success depended and continues to depend on creating and exacerbating societal divisions.

If business leaders’ tactics have heretofore failed to influence Trump, how might they actually affect the White House’s policy going forward?

One way of doing so is through boycotts. Organizations such as PayPal, the NCAA, and Cirque du Soleil, as well as numerous singers and bands, boycotted North Carolina to protest Republicans’ attempt to legislate where people urinated. The current Democratic governor was elected in a squeaker and inaugurated in January, and the bathroom law was repealed in May. It is plausible, even likely, that the boycotts directly led to the changes in policy. However, North Carolina is just one state; the national parallel seems improbable. It would be difficult and exceptionally costly for Apple to move its headquarters from Cupertino to Vancouver.

If the U.S. is too big to be boycotted, then CEOs’ alternative is to work through the courts and Congress. Corporations are now legally considered people; they can support candidates directly and openly. Many organizations and wealthy individuals actively influence or have influenced policy through campaign contributions, direct involvement in campaigns, or through the courts. If business leaders wish to move beyond symbolism, they will need to use the power of the purse to make it difficult for the president to enact his policies: They can support the incumbents and candidates that will check the president and work to defeat those that give him a blank check.

Only CEOs who are personally powerful and motivated will choose to move beyond the symbolism of public statements—and even then most likely on their personal as opposed to corporate dime. Broader political action will not happen until investors and customers are dissatisfied with the purely symbolic nature of CEOs’ public statements and pressure leaders into taking bolder public stances. This dissatisfaction will only arise if business leaders’ silence on serious political or social issues begins to negatively impact the company’s bottom line.

If knowledge workers start collectively and publicly seeking to work for companies that actively support pro-immigration policies or social diversity, that might make political action good for private enterprise’s bottom line. In the meantime, we’re likely to continue reading open letters that sound impressive, but don’t have any tangible influence on the president’s policies.

Brent Goldfarb is an associate professor and academic director of the Dingman Center for Entrepreneurship at the Robert H. Smith School of Business at the University of Maryland.


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