THE RISE OF CEO ACTIVISM

 THE RISE OF CEO ACTIVISM - BY SIX SHOOTERS

Despite being a relatively new term, CEO activism has been designated a traditional definition which explains it as when a CEO uses the platform and position they have to weigh in on a politically or socially sensitive issue. However, there are a considerable number of individuals who feel “activism” is too strong a word to be used in this particular context. This makes sense when one compares the actions undertaken as a part of “CEO activism” against the efforts of climate change activists. There have been only a few cases where a CEO has gone beyond making a public statement about any issue. While this in itself is commendable, it does not justify the fanaticism associated with the word activism.

So now that we understand that “activism” in CEO activism is not to be taken literally, we must look at what exactly one expect from an activist CEO. Marc Benioff, the founder of Salesforce, says that CEO activism is more of an expectation, an expectation that millennials have from their CEO’s to do the right thing. If this is true, then, one would find CEO activists speaking out on issues in a manner that is in line with the millennials’ thought process. In many cases, this is valid; however, there have been instances where the exact opposite has been observed, the CEO’s taking stances which would not be in line with millennial way of thought. Moving forward, we will take a look at such cases along with cases where CEO activism has helped the society.

CEO activism is essential as it is quite evident that employees look upon higher leadership as their role models. Thus, it serves a way to increase employee engagement. Sometimes employees deliberately wish their company heads to take decisive stands on certain social or political issues as happened most recently in the case of Amazon and Facebook. Many of the employees left their jobs as they were disappointed with the fact that their company was not taking any stand against some of the mala fide posts, as they call it. Thus, as companies become more accountable to their employees, CEOs need to rise to the day-to-day issues which affect the nation and the world. 

In line with keeping up the expectations that business leaders should lead the way to make a positive impact in the world the CEO of PayPal, Dan Schulman, took the initiative in 2018 to call out the discriminatory practices of an American law firm. He stood against their rule, which required people to follow the gender mentioned on their birth certificates while using the bathroom. This led to a transgender rights issue. 

Apart from employees, the world at large pays attention to their views. Today, more than ever before, ordinary citizens are interested in the opinions of the industry leaders as penetration of social networking sites is on the rise. Thus, it makes sense that CEOs come forward and express their views on political, social and economic factors in addition to their own companies. 

Even Kiran Mazumdar-Shaw, the CMD of Biocon, has known to be quite proactive in leveraging social media to raise her voice about issues ranging from the tax rebate offered by Nirmala Sitharaman to the widespread urban development in Bangalore as well as hypocrisy in social arenas, gender issues in the field of science and consumer awareness.

As CEOs, a person’s opinions are no longer his personal views but get associated with the company’s name. In this way, it often gives sneak-peek into the ideals and values that the company stands for. A few years back, during the LGBTQ movement, many companies stood by the community in their struggle, and this led to more inclusive workplaces for the LGBTQ community. 

These days we have witnessed an increasing trend of CEOs being more vocal on political issues in many parts of the world, including India and the USA. Satya Nadella, Microsoft's Indian-origin CEO, also expressed concern over the contentious Citizenship Amendment Act (CAA) in India. He was against the idea of discriminating under the grounds of religion and expressed his willingness to see a Bangladeshi immigrant creating India's next unicorn company.

In some instances, CEOs are not afraid to go the extra mile. Rose Marcario, CEO of Patagonia, an American clothing company voiced concern against the Trump administration's move to reduce the area of Bears Ears National Monument in Utah by 85% and Grand Staircase–Escalante National Monument by 50%, which stand as national monuments preserving natural and cultural diversity. Reducing its size invites the possibilities of selling off land to mining and industrial cooperation, which would kill its rich diversity and heritage of Native Americans. Patagonia has joined hands with the Native American tribes to preserve the diversity and file a lawsuit against the administration on the grounds of the illegality of the Presidential Proclamations. In certain instances, it’s not just one, but several CEOs come together, for example, CEOs of 14 F&B companies like Coca Cola, Nestle etc. cosigned a letter urging the government to take appropriate steps to address climate change before the 2015 UN climate change meeting in Paris.

Considering the nature of CEO activism, limited people such as only the CEO and the PR team are involved and the interpretation of “doing the right thing” becomes highly subjective as any stakeholder, especially customers and employees, have a varied opinion on any issue. Hence, there are instances of this activism doing more harm than good. Now it is easy for a CEO or a board to voice out what they feel, but the customers and the employees take these opinions very seriously. If the ideas don't align, customers may stop buying from the brand/company altogether, and the employees may start bad-mouthing the company and propagate a biased negative image. Both these reactions can damage a company severely. Therefore, it is imperative that companies carefully assess their stakeholders and cautiously tread when voicing out their opinions. Airbnb faced severe backlash when they adopted their CEO - Brian Chesky’s political views and decided to remove 200 listings from Israeli settlements in the West Bank. This led to not only loss of consumers for them but also several lawsuits on account of discrimination. 

In this new era, where we see that communication to masses, in general, is a click away, people look up to their leaders for what they believe and think of burning issues. It, therefore, becomes imperative that the leaders pro-actively come up and speak their minds out. This deed of CEO activism is the need of the hour and is the requirement of the day. With a little moderation and caution, this novel practice can help a company achieve great heights.