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It was an unusual squabble. In one corner, was the CEO of Qantas, Alan Joyce. In the other, was Australia’s immigration minister, Peter Dutton. The issue which saw them trade blows was the same-sex marriage debate. Joyce threw his company’s support behind the Yes campaign. Dutton criticised Joyce for using his position at the iconic airline to fly his own agenda.

Joyce is not alone in voicing an opinion on something close to his heart. Around the world, a growing number of CEOs are taking public stands on societal matters unrelated to their company’s bottom line. Business leaders are stepping onto centre stage and speaking out about hot-button issues, arguing that companies have a higher purpose beyond maximising shareholder value.

Of course, not everyone believes that corporate bigwigs have a right to personally align themselves with controversial issues which have no direct link to their business. In the words of one company director:

People (do not) invest in companies because they want to hear somebody’s personal, political, social or corporate view … They invest in the company because they believe there’s going to be shareholder quality there. To get up there because a corporate CEO has a pulpit to basically tell the world what they think … that’s not what investors are looking for … Just give me your opinion on how you’re going to make the company grow.

Experts warn that CEOs who weigh in to charged issues face a delicate balancing act. Taking a “position of conscience” about an issue that you are passionate about is seen by many as acceptable. However, care must be exercised to ensure that the message is conveyed in a way that does not alienate employees, customers, investors or other stakeholders.

The high-profile Executive Chairman of Starbucks, Howard Schultz, learned that lesson the hard way. In 2015 he inserted his company into a thorny issue - race relations in the US - and it backfired. The company encouraged its baristas to write the words “race together” on cups before handing them to customers. The idea was to get people talking about an important social issue.

The irony is that Starbucks did create a national conversation, but for all the wrong reasons. The well-intentioned but controversial campaign was a massive failure and was branded insensitive. In the words of one academic: “Brands like Starbucks should think carefully about publicly jumping into debates about issues that are polarizing and difficult unless there is a compelling need to do so”.

People don’t visit or avoid a Starbucks because of its views on race. Nor do people fly or avoid Qantas because of its views on gender equality. My wife and I are loyal customers of Qantas and one of the main reasons we fly long-haul with our national carrier is its impeccable safety record. The personal views of the airline’s CEO are of no relevance to us.

There is an obvious question that arises here: Does CEO activism actually change hearts and minds? A CEO’s viewpoint can sway public opinion, but research shows that CEOs fare better when the issue/s they promote bear a tangible connection to their business. When the issue is a non-revenue driving activity, cynicism takes hold.

In my ten years as a blogger, I have commented on political issues (like over-regulation) that impact Gateway. I have commented on economic issues (like interest rates) that impact Gateway. And I have commented on technological issues (like artificial intelligence) that impact Gateway. But when it comes to social issues (like marriage equality) I have refrained from comment.

I’m not critical of CEOs who speak out on a contentious issue, but that’s not my style. I’m conscious that when a business leader emerges as a prominent advocate for a cause, he/she may create as many enemies as admirers. While there is a part of me that would relish the prospect of taking on a greater role in framing public discourse, my business is to focus on Gateway business.

Peter Dutton told the 30 Australian business leaders who were at the vanguard of the marriage debate to “stick to your knitting”. I have some empathy with that advice. As a consumer, I don’t particularly want the CEO of a company whose product or service I buy telling me how I should think on a social issue which is totally unrelated to that company’s activities.

Clearly, there are risks and benefits of being outspoken and CEOs must navigate the minefield of public statements with care. Company boards have a role to play here in determining the degree to which the personal identification of their CEO - and by extension the organisation’s brand - is linked to a moot topic.

No doubt, the playbook for corporate leaders wanting to wade into social issues will evolve over time. And down the track, my current hesitance to speak out on broader issues will almost certainly be viewed as antiquated. But as sure as God made little green apples (am I allowed to invoke a deity in a business blog?), those CEOs who forthrightly voice their values in fraught public debates will upset one side or the other of our increasingly polarised society.

Regards,
Paul J. Thomas, CEO

Comments

avatar JOE NOREN
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PAUL, YOUR COMMENTS NOT ONLY APPLY TO CEO'S BUT SHOULD ALSO APPLY TO THE SPONSORS OF LATE NIGHT TV "COMICS". THEIR POLITICAL
BIAS HAS NOT ONLY TURNED PEOPLE OFF THE PROGRAMS BUT THE PRODUCTS AS WELL. OF COURSE I AM REFERRING TO UNITED STATES TV, I DON'T KNOW IF IT APPLIES TO WHAT IS HAPPENING IN AUSTRALIA. BUT AS WE KNOW, TELEVISION HAS TURNED INTO A VAST WASTELAND..
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avatar Cameron Lowe
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Triple bottom line. Social, environmental and financial.
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CEO Paul Thomas