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Monday, November 23, 2009

Should companies comment on politics?

Back in August, John Mackey (Co-founder and CEO of Wholefoods) was pretty heavily criticized for an opinion piece he wrote in the Wall Street Journal “ The Whole Foods Alternative to ObamaCare.” A story in ABCNews, typical of the headlines generated, carried the subtitle “Branding Experts Say CEOs Should Stay Quiet When It Comes to Politics”

This headline is not confined to this side of the Atlantic. In October, Sir Terry Leahy, Chief Executive of Tesco and Sir Michael Rake, Chairman of BT, were criticized in an opinion piece in the Times headlined “When business leaders start getting political, it is time to switch off” for speaking on the ‘political issues’ of climate change and education.

The fourth dimension in the Four Dimensions of Sustainability is the opportunity that companies have to ‘Inform and Influence’ the views of all stakeholders, including government and civil society. I have proposed there that companies use the opportunity they have to influence stakeholders. In a post back in September “Isn’t the Healthcare debate a CR Issue too” I questioned why more companies were not speaking out on healthcare issues for example.

I have often contrasted the approaches of the Confederation of British Industry (CBI) and the US Chamber of Commerce on climate change. While I, and BT, support one of those approaches and contest the other, at no time would I suggest that trade associations, companies or their CEOs should not speak out with a position on the issue.

Companies must represent their interests. If the education system is failing to deliver the required quality of employees or anticipated environmental change is threatening future supplies of a raw material for example, then CEOs are obliged to comment on this. Of course this needs to be within the context of taking seriously their own responsibilities in the particular field. If we want companies to be serious about their impact on sustainability we need them to take an active role in society.

But while corporate leaders must speak out on societal issues that effect their business together with the outcomes they would like to see, should they propose specific solutions? What is the best solution for healthcare cost and availability, which balance of tests and course work is optimum for high school education, cap and trade or tax which is better public policy? I doubt corporate leaders are experts on all these things, but then perhaps neither are political appointees or civil servants in many cases. And it can be hard to draw a clear line between defining required outcomes and suggesting solutions.

In my view the corporate world has been too far away from these important civil society debates in the past couple of decades and the recent increased involvement is welcomed. It is important is that positions should be transparent in the extent to which they represent the view of the individual, the best interest of the company and the best interest of society (for the record, the views in this post reflect mine and mine alone!) I for one would prefer to see C-level execs overshoot a little in expressing their views before we try and pull back, and I think we are far from that right now.

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