A revival of virtues through CEO activism
CEO activism may be uncomfortable for many, yet it seems necessary when other institutions are weakened through dishonest rhetoric and actions. The future direction of CEO activism should focus on virtue ethics, reinforcing civic and business leadership.
The intersection of business and society is not a clean one, and like most intersections, things can get messy when you’re breaking new ground. With CEOs getting involved in social issues from voting rights to gun control, companies are at risk of turning blue or red and attracting ideologically aligned team members and customers. In a recent Harvard Business School Working Knowledge article, James L. Heskett, UPS Foundation Professor of Business Logistics, Emeritus, asked two essential questions:
Where does CEO activism go from here?
Are CEOs representing employees?
CEO activism is the frontline for civic responsibility.
The first answer is unclear. CEO activism is a new area, just as employee activism is. Two trends, I believe, may determine what happens next. The first trend is the accumulation of civil rights of corporations through the U.S. court system. While women and minority groups took to the streets to raise awareness and gain new rights, U.S. corporations took a different path through our court system. They won protections and civil rights through the U.S. Supreme court, and they did so with greater speed than most minority groups. The courts have said that corporations have rights because their members do.
Additionally, corporations have been involved politically for years, which has intensified through the Citizens United case. The money from corporate political action committees (PACs) directed to political leaders may be challenging to track. One example, Senate Minority Leader Mitch McConnell received $4.3 million from business PACs in the 2020 election. The trend of corporate political activism through political contributions and the use of their civil rights will likely flourish.
The second trend lies in what Republican leaders do going forward. If Republicans continue to embrace the “Big Lie” about the past presidential election, business leaders will need to continue to raise their voices. Most business leaders would like our political institutions to remain intact rather than being overthrown by Republicans. Business leaders lean toward wanting civil rights for others, too, just as they have achieved for their corporations.
CEOs represent a diversity of stakeholders.
The answer to the second question is more complicated. My answer begins with stakeholders. When the Business Roundtable re-centered capitalism on stakeholder value, CEOs must now accept the responsibility of enhancing value for diverse stakeholders. Stakeholders include team members, partners, shareholders, customers, and communities.
When it comes to divisive political issues, some CEOs may want safety and freedom for their stakeholders, and some may craft more progressive positions on different policies. Many will do so with their stakeholders in mind. The good news is that most perspectives are publicly known, and stakeholders can decide if they want to join, do business with, or otherwise engage with these companies based on their viewpoints. If corporate leaders don’t punish those with different views, everyone can get along in a respectful, positive manner.
More than ever, CEOs can revive virtues through leadership.
In today’s political climate, I believe CEOs – whether they realize it or not – represent virtues, and CEO activism needs to focus on virtue ethics and strive toward the common good. Virtues are foundational in civic and corporate life. The Virtues Project outlines 100 virtues, and some include compassion, courage, empathy, equity, honesty, integrity, respect for others, justice, and trust.
We need reminding of the necessary societal virtues of operating with a sense of doing what is right for as many as possible. When it comes to embracing stakeholder capitalism, virtues are a vital reminder of what we ought to do for others rather than our self-interests.
In recent research in the Journal of Business Ethics, the authors align The Virtues Project strategies to what is necessary for good leadership (i.e., morality). Below is a summary of each strategy and the corresponding leadership action.
Speak the language of virtues – identifying the virtues in a situation. Leadership action = Develop moral reasoning
Recognize teachable moments – identifying what virtues may lead to a better result. Leadership action = Convert experiences into new learnings
Set clear boundaries – identifying limits and expectations for betterment. Leadership action = Encourage behaviors of trust, honesty, forgiveness, and compassion
Honor spirit – providing time to reflect on meaning, character, and wellbeing. Leadership action = Allow time for renewal, especially around connection and purpose
Offer companioning – enabling time to be heard. Leadership action = Prompt time for listening, self-reflection, and understanding of challenges and issues
While too many political leaders have conveniently forgotten our foundational virtues, CEOs can (and should) fill the void and be active for the greater good of our society. The next steps for CEO activism need to be in the revival of virtues bringing citizens and team members together – finding common ground and creating something better than before.
CEOs have a platform, and they should use it to raise our sense of morality and lead with an ethic of care.
References
Colvin, G. (202 C.E., August 19). Revisiting the Business Roundtable’s “Stakeholder Capitalism,” one year later. Fortune.
Evers-Hillstrom, K., & McFadden, A. (2021, April 8). McConnell battles corporate America after benefiting from business interests. OpenSecrets News.
Heskett, J. L. (2021, May 3). Where does CEO activism go from here? HBS Working Knowledge.
Newstead, T., Dawkins, S., Macklin, R., & Martin, A. (2019). The Virtues Project: An approach to developing good leaders. Journal of Business Ethics, 167. https://doi.org/10.1007/s10551-019-04163-2
Winkler, A. (2019). We the corporations: How American businesses won their civil rights. Liveright Publishing Corporation.