After the high school shooting in Parkland, Florida that killed 17 earlier this month, CEOs are beginning to respond. Several fast-acting companies have severed ties with the NRA, but is addressing such a problem the role of business?
CEOs are judged for their competence, but also their character. Yes, leaders can be prompted or trapped by heroic myths. Tough-guy warriors John Wayne and Sylvester (Rambo) Stallone avoided military service while gunslinger Clint Eastwood served his country only as lifeguard at a pool in California’s Ft. Ord during the Korean War. Supposed “rags to riches” pillar Horatio Alger was actually a defrocked preacher who wrote a single novel and died penniless. And no, there really was no George Washington cherry tree.
Similarly, some CEOs recycle the myth that walls divide their private business enterprise job and public leadership duty. Often chanting the 1970 quip of economist Milton Friedman, “The only responsibility of business is the bottom line,” some thus justify the current narrow commercial focus of their enterprise and the major trade associations.
In reality, the sectors are hybrid today—and were in economist Adam Smith’s day as well. The Business Roundtable was forged by progressive business leaders from IBM (IBM), GE (GE), GM (GM), DuPont, and other top firms to address societal concerns—the very same year that Milton Friedman condemned such social missions. They wanted to burnish the bad image of business from the 1960s. I knew these industrialists who successfully championed the Superfund environmental cleanup, the Foreign Corrupt Practices Act, fair hiring practices here and abroad, and training for workers displaced through trade and technology.
There is a myth that the NRA and the big business lobby always opposed business regulation and gun control. Earlier generations of business leaders promoted regulation in finance, interstate commerce, travel, telecommunications, and food safety. Business leaders, along with the NRA, actually favored historic gun regulation, such as the 1934 National Firearms Act outlawing assault weapons—then gangster-revered submachine guns—Tommy guns. They supported The Violent Crime Control Act of 1994, banning military-style semi-automatic assault weapons, but that act expired a decade later.
Then the leaders changed. Through new angry ideological filters, the NRA flipped, lobbying against legislative renewal efforts. The Second Amendment became the only absolute right without boundaries. Now, a dozen states that even block cell phones, gum, and smoking in courtrooms allow deadly weapons. Is no backyard artillery banned under the Constitution’s “regulated militia?”
There is a big disconnect with the public. Last year, a national gun owner survey sponsored by Americans for Responsible Solutions suggested most gun owners, 67%, believe that the NRA has lost its historic mission promoting gun safety to one of lobbying for gun makers’ interests. According to a Quinnipiac poll released last week, 67% of Americans favor a ban on assault weapons. Even 97% of Americans favor enhanced background checks and other measures the NRA blocks.
With the nation rattled by 345 mass shootings in 2017, plus, the deadliest year for such incidents, the public is looking to transcend NRA lobbying. With 5% of the world’s population, the U.S. has one-third of the world’s mass shootings—25 times that of other affluent nations.
While politicians and business leaders were stunned last August after President Trump’s initial failure to condemn white supremacists in the wake of violent protests in Charlottesville, Va., ad-hoc actions by individual CEOs filled the void left by politicians and trade associations. The inspiring action of Merck (MRK) CEO Ken Frazier to quit President Trump’s manufacturing council with a statement condemning the normalization of hate groups ultimately sparked the conscience of others and led to the collapse of several White House business advisory councils in protest.
Last month, Blackrock CEO Larry Fink boldly proclaimed business must step up. He wrote: “Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
Paradoxically, Blackrock is the largest owner of major assault weapon makers American Outdoor Brands (Smith & Wesson) at 11% and Sturm Ruger at 16%, but has demurred from demanding AR-15 discontinuance, claiming that the ownership stakes are merely passive holdings through its index funds. Those index funds, however, select stocks based on a mix of objective and subjective business conduct criteria. This is how the Florida Retirement System inadvertently owned stakes in these same gun makers that killed its teachers. Fink has to find a balance between those holdings and his call for responsible corporate citizenship.
Some CEOs are fearful of taking a stand and triggering customer backlashes or shareholder revolts. But scores of customer establishments across the nation have long banned guns including: AMC Theaters; BBT Bank; Chipotle (CMG); Chili’s; Costco (COST); Delta (DAL); Hooters; IKEA; Jack-in-the-Box (JACK); Jo-Ann Stores; Panera; Regal Theaters; Sonic; Starbucks (SBUX); Target (TGT); United Airlines; US Bank; Waffle House; and Walgreens (WBA). Walmart (WMT) dropped the AR 15. In rapid succession, First National Bank of Omaha, Symantec (SYMC), Alamo, Budget, Hertz, National, Enterprise, Twitter (TWTR), and Wyndham (WYN) broke ties with the NRA late last week.
Instead of fearing boycotts for snubbing the gun lobby, many business leaders now fear the opposite backlash, as those with continuing NRA ties are showcased by public safety advocates. And 66% of consumers believe it is important for brands to address socio-political issues like gun control. Nonprofits are taking to social media to encourage media and tech companies to block NRA ads. #BoycottNRA was the number one trending topic on Twitter Friday in the United States.
Akin to the business leadership response to Merck’s Frazier, the cracks in the dam spread slowly at first, and then there is a groundswell. Many corporate leaders are earning the business the old-fashioned way.
Jeffrey Sonnenfeld is Senior Associate Dean for Leadership Studies and Lester Crown Professor of Management Practice at the Yale School of Management as well as author of Firing Back: How CEOs Rebound From Career Disasters(Harvard Business School Press).