Great ResignationDiversity and InclusionCompensationCEO DailyCFO DailyModern Board

CEOs Embrace Activism

February 7, 2017, 4:28 PM UTC

The amicus brief filed by nearly 100 companies on Sunday in the Trump immigration-ban imbroglio marks a turning point in CEO activism. By wading into a high-profile, hyper-politicized national debate, these leaders have ventured where only few have gone before. “The amicus brief is a striking milestone in CEO activism and advocacy,” Leslie Gaines-Ross, chief reputation strategist at the Weber Shandwick communications firm, tells me. “These CEOs are taking a stand against a federal order, not a state one, and challenging a president, not a governor. They are now going much further than they did before. They are taking a stand on national policy, urging that immigration is a definite good not just for their companies, but for the country.” The Trump presidency, still not three weeks old, may be prompting business leaders to shift their role in the nation’s public life.

A handful of CEOs in recent years have taken public stances on social and legal controversies. Starbucks’s Howard Schultz has declaimed on race relations, gun control, and other matters. Apple’s Tim Cook publicly opposed laws that would have permitted discrimination against LGBT citizens. Chick-fil-A’s Dan Cathy opposed gay marriage. Salesforce’s Marc Benioff has spoken on pay equity. But most CEOs have seen little to gain and much to lose by jumping into such contentious, emotional debates.

Now, almost 100 of them are publicly opposing the president and millions who support him on an issue that has brought out thousands of angry, chanting, sign-waving demonstrators on both sides of the issue. These companies could have expressed their views privately, through lobbyists or phone calls to officials. But now they and their leaders are on record, and there’s no turning back.

A close reading of the brief suggests they’ve learned from the experience of previous activist CEOs. Research by Weber Shandwick found that the public is likelier to support activist CEOs when they speak out on issues related to the company’s business. When Cook issued anti-discrimination statements, for example, he made clear that Apple wants to be open and welcoming to all potential customers and all potential employees. By contrast, when Schultz encouraged baristas to engage customers in conversations about race, he emphasized that this was not related to the business: “This is not some marketing or PR exercise. This is to do one thing: use our national footprint and scale for good.” Though it can’t be quantified, Schultz appeared to spark more controversy and opposition than Cook did.

The amicus brief argues that Trump’s two executive orders on immigration are bad for U.S. business, and the argument is compelling. The central point is that the orders introduce tremendous uncertainty into international travel, and uncertainty is sand in the gears of business. The CEOs are taking their stand on a basis that people are most likely willing to accept.

Of course virtually no one will download and read a 53-page court filing. (BTW, the brief is signed by 96 companies, not 97 as widely reported; one of them is listed twice.) On the other hand, there’s safety in numbers; with 96 names, each one attracts less attention.

Will those 96 companies lose more than they gain? Will they take public stands on more hot-button issues that are sure to arise? Every business leader needs to pay attention. Business’s role in public discourse on policy issues may be changing.

You can share Power Sheet with friends and followers here.

What We're Reading Today

Pence may need to cast Senate vote... order to confirm Education Secretary nominee Betsy DeVos. The Senate will likely vote today; in the event of a tie, vice president Mike Pence would cast his vote for DeVos, marking the first time a vice president has broken a tie on a cabinet confirmation. ABC News

SEC may rescind pay gap disclosure
Acting SEC chairman Michael Piwowar has asked the commission to look into the rule requiring companies to disclose the pay gap between the CEO and the median employee. Companies have complained that the rule, which would take effect in 2018, is burdensome and could be misleading. WSJ

Biotech worries about H1-B visa changes
Companies including Robert Bradway's Amgen, John Milligan's Gilead Sciences, and Cedric Francois's Apellis Pharmaceuticals are growing more concerned about President Trump possibly restricting H1-B visas. A crackdown could slow research on cancer drugs and other medications because the researchers and scientists are highly specialized and come from many countries. Bloomberg

Honda and Hitachi team up on electric vehicles
Honda CEO Takahiro Hachigo has formed a joint venture with an auto-parts subsidiary of Hitachi to create motors for electric vehicles. Honda last week announced a venture with Mary Barra's General Motors to create hydrogen fuel cell power systems. Fortune

Building Better Leaders

To improve your efficiency in the morning...
...act like a robot for the first hour. Wake up at the same time daily, follow a set routine for dressing and eating breakfast, and leave at the same time. That preserves your willpower for when you get to work. Science of People

It's time to end the myth that millennials need constant praise
While they like continuous feedback, it's not constant praise they're looking for. It's empowerment, says BetterWorks CEO Kris Duggan. Fortune

Entrepreneurs should think more like farmers
Whether it's finding time to rest or trusting the bigger picture and standing your ground to reach it, G2 Crowd CEO Tim Handorf uses aspects of his farm upbringing today. Quartz

Trump's Statements

Court to hear appeal on travel ban today
Federal appeals court will hear arguments on President Trump's immigration ban. The Justice Department filed an appeal to reinstate the ban after a lower court judge ordered a temporary halt on the directive. The Justice Department argues it's within the president's power to issue such an order. Washington Post

Trump blames media for ISIS coverage
Speaking to military personnel, President Trump claimed that the media has downplayed the attacks by the Islamic State, adding they "have their reasons." The White House then released 78 instances where an attack was linked to the group. The list included the Paris attacks, Brussels, San Bernardino and Orlando attacks, all which received extensive worldwide coverage, while other attacks listed received local coverage. It marks the second instance where Trump has used a speech in front of the military—usually meant to discuss sacrifice—to attack the media. NYT

Trump's fiduciary rule order causes confusion
Last week, Trump ordered a review of the fiduciary rule that was developed to limit conflict of interests from retirement advisors. But Trump's order didn't go as far as draft versions did, which called for a 180-day delay of the rule. This has left financial firms in limbo on whether to move forward in preparing for the rule, which is still set to go into effect in April. Fortune

Up or Out

Zenefits has named Jay Fulcher CEO. ZDNet

Teva Pharmaceutical Industries CEO Erez Vigodman has stepped down. He will be replaced by Yitzhak Peterburg, who relinquished his chairman role at Teva to serve as CEO on an interim basis. WSJ

Fortune Reads and Videos

Denmark appoints an ambassador to Silicon Valley
Technology companies are so important to the nation that it wants a representative in the Valley to help influence decision makers. Fortune

Even though Howard Schultz is stepping down as Starbucks' CEO...
...he will likely continue getting paid as if he's a CEO. Schultz has had a long-running agreement with Starbucks that he will make as much as the CEO, even if he no longer has the role. Fortune 

A Syrian refugee is suing Facebook...
...because a viral selfie he took with German Chancellor Angela Merkel has been used in a number of fake news stories that link him to terrorist attacks. Fortune

The number of U.S. solar jobs jumped almost 25% last year
A large increase in the demand for solar panel installations led to the rise in jobs. Fortune

Quote of the Day

"The point is we're at a 50-50 moment where we only need one more senator to break and vote against Betsy DeVos and she won't be confirmed, and so we want to make our argument up until the last minute to see if we can get that 51st vote." —Senator Chris Murphy, explaining the Democrats push to deny DeVos the education secretary role. DeVos is expected to be nominated today, with Vice President Mike Pence casting the deciding vote. CNN

Produced by Ryan Derousseau