Corporate affairs

When should CEOs speak out?

If there was one question that was on most people’s minds at the recent Corporate Affairs Summit, it was that one. It was also a question to which nobody really had an answer.

Research, such as the Edelman Trust Barometer, indicates that employees now expect their chief executives to speak out on issues that matter to them, but in a world that is increasingly polarised, corporate affairs professionals are aware of the potential minefield into which they could be stepping.

Indeed, many were startled when, after announcing support for Ukraine, they were accused of racism by some employees, who complained other conflicts had been ignored. The current situation in the Middle East is even more rife with difficulties.

Some corporate affairs professionals believe it is inappropriate for their chief executives to speak out on any geopolitical matter but understand these can impact employees and so highlight any available support, such as mental health care, offered by their companies and any humanitarian aid being provided.

Others have a more structured approach. When asked, Ed Petter, the outgoing corporate affairs director of BT*, told the summit that the telecoms group has a set of principles, nicknamed the Willetts Principles after Helen Willetts, its director of internal communications, which are shared internally with its 130,000 people.

The eponymous principles offer insight into the issues on which BT will comment externally. Being consistent in applying these means that the company avoids speaking on issues that obsess the media rather than relate to BT. It will speak up on issues relating to four scenarios:

1)     When BT is the subject of the issue

2)     When it is affiliated in some way with the issue

3)     When it has a relevant point of view, such as women in tech

4)     When a global movement, such as Black Lives Matter, touches on issues of direct relevance to its own policies

As Petter explained, publishing the principles can take the sting out of internal criticism for BT’s stance on various issues, because while some may disagree with the decision taken, they can understand the rationale.

As luck would have it, I was also recently speaking to Sally Susman, chief corporate affairs officer at Pfizer, author of Wall Street Journal bestseller, Breaking Through, which covers this very topic.

Just like BT, she has created a framework which Pfizer uses to decide whether it should opine on issues. It has five questions, which Susman admits are not cast in stone, but can be updated if appropriate. After all, expectations of businesses from society, consumers, employees and investors can – and do – change.

1) Does the issue relate to our purpose?
Pfizer’s mission is breakthroughs that change people’s lives, which offers latitude to speak about public health matters. The deforestation of the Amazon may be an important issue, but it’s not Pfizer’s issue. As she says in her book: ‘Most consumers don’t think about where Pfizer or any other company stands one very issue facing society.’ If a company over-uses its platform, it dilutes its impact.

2) How does the matter impact our stakeholders?
Today’s companies have myriad stakeholders, often with conflicting agendas, so there is a need to prioritise.
Pfizer prioritises patients and its people, but Susman says your own people should always have the edge. Staff who feel ignored or alienated can become troublesome detractors.

3) What are our choices for engagement? In other words, what are our options?
It’s very easy to get sucked into signing petitions or adding a chief executive’s name to an open letter, but that’s being reactive. Be proactive. Take back control. Set your own agenda. Write a letter from the chief executive which is distributed internally before being published on the corporate website.

4) What is the price of our silence?
Some issues may not fit neatly with your corporate purpose, but the cost of saying nothing is just too great. This was seen after the brutal murder of George Floyd, when companies spoke out on racism and announced their support for Black Lives Matter, while also donating to racial causes. Susman believes silence on topics, such as racism and homophobia, is unacceptable.

5) How does it relate to our values?
As Susman says, she may not know when the next big controversy lands, but at least she knows how to evaluate it for Pfizer.

A final approach is offered by Paul Argenti, professor of corporate communications at Dartmouth College, which was published by Harvard Business Review. He suggests companies should answer three questions before making any decision on speaking out.

1)     Does the issue align with your company’s strategy?

2)     Can your company meaningfully influence the issue?

3)     Will your stakeholders agree with speaking out?

If the answer to all three questions is yes, then there is an opportunity to speak out as a leader on the issue. If the answer to two questions is yes, then there may be an opportunity to speak out – but not to lead the debate. If there is only one (or even no) affirmative answer, then keep schtum.

In truth, Argenti’s questions seem more appropriate for social rather than geopolitical issues, but since so many people keep asking me what approach others are taking, I thought I’d share all three.