You know their names: Emma Gonzalez (age 18); David Hogg (age 18); Naomi Wadler (age 11); Yolanda Renee King (age 9). These young people, and many more, stand at podiums to eloquently, outspokenly and loudly demand tighter gun control legislation from our political leaders following the Marjory Stoneman Douglas High School shooting that left 17 dead. They are organizing protests on the White House lawn and in cities across the U.S. and around the world. They grace the cover of TIME magazine. They have become powerful influencers of social media content around this issue writ large. Indeed, Emma Gonzalez has more Twitter followers than the National Rifle Association. They established the madly-trending hashtag #never again.
You also recognize these names: Blackrock, Dicks Sporting Goods, Delta Airlines, United Airlines, Citigroup, First Omaha Bank, MetLife, Symantec. CEOs from these companies are joining the calls for tighter gun control laws in the wake of the Florida school shooting. They are telling the young leaders, We have heard you and we will use our voice and capitalistic power towards the same end.
These firms dont over-represent the top of the Fortune 500 company list; the vast majority of the Fortune 500 companies remain silent. But Citigroup, 30 th on the list, may have a far-reaching impact with its statement that it will no longer work with any retailer who does not enforce stricter gun control policies, such as no longer selling bump stocks or high capacity magazines. Citi is not telling its customers how to use their cards; they are making a statement around the types of businesses with whom they will partner. On the other side of the debate, locally-headquartered, #24 Wells Fargo says that gun control policies are not up to the bank, but should be left to the political and legislative process.
Risks vs. rewards
Corporate leaders along with their financial bottom lines face distinct risks when they take a stand. They experience retribution via customer boycotts and negative social media campaigns that can damage their reputation. Delta Airlines lost tax advantages when the city of Atlanta punished them, some investors threaten divestiture, and the conservative press is lambasting them.
But these companies are also experiencing positive returns that so far seem to be outpacing the negatives. Larger-scale social media campaigns herald their action and use of voice, customers claim they will switch to their products and services, large institutional investors, like CALSTRS, who represent a significant amount of access to capital, applaud them.
If economist Milton Friedman were alive, he likely would reprimand the CEOs using their pulpit and power. He would surely espouse his famous belief that the business of business is business and that the CEOs only role is to maximize shareholder returns, not focus on social or environmental issues.
Is this a new role for corporate leaders? Is this the right role? In the face of risks of customer boycotts and backlash, why do they speak out in the first place? We have seen a recent trend of corporate leaders taking a stand on issues like transgender bathrooms, gay marriage, the veracity of and need to address climate change, diversity, and gender equity. They stepped down from President Trumps business advisory council, triggering its demise. Why are they choosing to do so?
CEOs as human beings
First of all, we seem to forget that CEOs are human beings; human beings who are affected by this tragedy of 17 teenagers being killed while simply getting an education, on top of other school shootings and office shootings and church shootings. These human beings are daughters and sons and mothers and fathers, as well as and even before they were CEOs. And these CEOs are leading other human beings who are their employees.
There is a solid business reason and related return to listen to, respond to, and retaining their employees, not to mention attracting new employees who have choices of where they work. Ignoring and losing employees costs money. We spend a large chunk of our days, and hence lives, at our respective places of work. A significant number of Millennials people who were recently teenagers like those who are standing at the podiums now -- are current and future employees. In fact, there are more Millennials in the workplace now than any other generation. This generation is demanding that its leaders and employers take a stand on issues and causes that they care about and believe in.
Aside from employee demand, peers of CEOs are speaking out. These peers lead competitors of their companies. Companies exist to and win by competing. Corporate social responsibility has become a competitive advantage for companies in attracting capital, customers, employees, and press all of which leads to brand value. There are costs to silence. Simply not speaking is indeed relaying a message in that you cannot NOT communicate.
Today we live in one of the most divisive times under one of our most divisive and wildly tweeting presidents. A growing segment of our citizens senses an increasing leadership vacuum. Government leaders are being fired, or are leaving at their own accord, at record pace. Our government is changing direction on environmental protection, human rights, gender equity, open borders, pacts with the WTO on fair trade, and abortion rights.
Social and political stability means economic stability, and a mercenary business leader knows she or he needs to be successful, our country needs economic stability. Most if not all capitalism abhors instability and volatility. If other institutions dont act to better the social communities in which we live and the killing of 17 innocent school children in NO way is bettering our society we look for someone to take the lead. The business sector is currently the focus of that gaze.
In a way, corporate leaders have been given a hall pass to draft behind social, economic and political leadership, almost as free-riding citizens. So again, is this a new role for CEOs? Yes. Is this a short-term role for corporate leaders? I dont think so. That ship has sailed and is gaining rapid momentum. Once one speaks out about issues, it become difficult to be silent in the face of such issues as demand increases, on both sides of the issue.
Expectations have been set. There are self-serving and mercenary reasons for corporate leaders to speak up, but I stress that we tend to forget that companies are led by, and made up of, caring and feeling human beings. If a 9-year-old can stand up and shout #neveragain, then of course a 50-year-old CEO must also feel compelled to. She or he is, after all, a human being with a beating heart.