Corporate leaders who shy away from wading into politically and culturally charged waters have found little cover in recent years. Whether it’s Georgia’s voting rights bill, the overturning of Roe v. Wade, or the ongoing conflict in Gaza, CEOs are often expected to comment on the news of the day, if not take a stand on hot-button issues.
But 26% of companies have no set plan or criteria in place to determine when or how they should respond to issues, according to a new study surveying CHROs from Center for Executive Succession at the Darla Moore School of Business at the University of South Carolina. That’s troubling, the report’s authors say, because companies lacking that structure tend to rush to engage in issue-based conversations that they are ill-equipped to handle.
“This is only going to intensify over the next year,” says Anthony Nyberg, director of the Center for Executive Succession. “The importance of having a structure in place is significant because companies responding quickly made a big difference.”
Companies responding too slowly can become a statement in and of itself. When companies take four or more days to respond to an issue, it’s seen as a result of the pressure from employees, according to the report, rather than born out of the organization’s strategy, values, and mission.
Of course it’s not always easy for leaders to take a stand as people become even more divided on political and cultural issues. One anonymous chief human resources officer told Nyberg and the other study authors: “As soon as I take a stand, I anger half my employees and half my customers.”
In fact, it’s employees, more than a company’s customers, shareholders, activist groups, partners, or even politicians, who impact whether the organization responds to sociopolitical issues, according to the study—something that came as a surprise to Nyberg.
“It certainly seems more intense than in the past,” he says. “Generally in society when we think about stakeholders in a company, we think about shareholders and customers with buying power. So seeing how much companies respond to employee pressure was surprising.”
In recent years employees have grabbed more political power in the workplace, which may be one reason their view on what their employer does or doesn’t respond to, how, and how fast, holds more weight than other stakeholders’. The majority of workers now demand employers match their values and beliefs, and they’re willing to take less money to be at a like-minded organization. Companies have also found themselves competing for talent over the past few years, in a power shift that favored employees.
It’s of course not always easy for leaders to take a stand as people become even more siloed politically and culturally.
Going forward, roughly 70% of CHROs surveyed said they expect the frequency and extent to which CEOs and their organizations make public statements will remain the same; 18% said it will be less frequent; 8% said much less frequently; and only 4% expected the frequency to increase.
As we head into an election year, however, Nyberg says he and his coauthors have heard more concerns from leaders over how they will handle political and social debates that come up.
“There could be a sea change in how companies are going to respond to issues,” Nyberg says. “It’s a greater concern right now than it’s ever been… There is a zero percent chance there are less issues that come up for companies.”
