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Ready or not, the era of corporate political responsibility is upon us

Ready or not, the era of corporate political responsibility is upon us
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The politics of racial justice have become red hot, and major corporations are finding it hard not to get burned. On March 25, Georgia Gov. Brian KempBrian KempNorth Carolina county reverses course, ends coke machine ban MLB All-Star game to stay in Denver, judge rules MLB calls lawsuit over All-Star Game 'political theatrics' MORE signed into law SB202, a massive bill that alters voting rules by, among other things, reducing the number of drop boxes for absentee ballots and the number of hours they are available, making it a crime for ordinary citizens to hand out water to voters waiting in long voting lines and allowing the state legislature to override county election boards at will.   

Big Atlanta companies Coca-Cola and Delta tried to avoid getting embroiled in the fray, believing that working behind the scenes and making general statements supporting “increased voter participation” would suffice. But they were almost immediately confronted with boycott threats from activists. And on March 31, a group of Black executives took out a full-page advertisement in the New York Times condemning the Georgia law for restricting voting opportunities, which will fall especially hard on people of color. At that point, Coca-Cola and Delta reversed course, deciding to make strong public statements condemning SB202 as “unacceptable” because it would “make it harder for people to vote, not easier.”

Data show that voter fraud is vanishingly small, at around 0.0025 percent of votes cast. In a country with roughly 150 million voters, that comes to about 3,750 votes — not enough to change the outcome of a presidential election even if all of the fraudulent votes occurred in a single state.

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The bigger concern is that less than half of Americans who are eligible to vote actually do so. American voting participation rates rank 24th out of 35 OECD countries. The Black executives’ letter reminds us that the chief worry is not that too many people will vote but that too few will do so. They believe Georgia’s SB202 goes in the wrong direction. These are men and women who have achieved distinction within the business world despite the many systemic challenges faced by Black Americans in our business and political systems. They speak with a powerful and informed voice, and it is to the credit of Coca-Cola and Delta that they heeded the call of their Black colleagues.

Whether or not companies are comfortable with it, we are witnessing the dawn of the era of corporate political responsibility (CPR). Much as companies would like to avoid sticking their necks out in the overheated and polarized American political environment, they simply cannot do so any longer. In the U.S., and increasingly abroad, corporate leaders are criticized if they take a stand on political issues and criticized if they remain silent. Over time, companies have accepted expectations of corporate social responsibility (CSR), including accountability for their supply chains. More recently, they have recognized the need to create value for all stakeholders, and many are committing to a corporate purpose that goes beyond simply maximizing their payouts to shareholders. The logical next step is that companies are expected to integrate that purpose into any political activities, as well as within their operations.

For companies that seek to avoid being caught flat-footed, like Coca-Cola and Delta were initially in Georgia, their only recourse is to become savvier and more principled about whether and how to engage in political activity. They have to become clearer about what they stand for, and they need to be ready and able to articulate that in the public arena. Having a clear set of principles guiding political engagement will prepare companies to recognize when they need to step up to protect foundational institutions and individual rights, and when they need to step back and allow civil society to deliberate without undue influence. 

A good starting place is ensuring consistency between a company’s CSR commitments and its political influence strategy. Much of corporate America made commitments to diversity, equity and inclusion in response to the Black Lives Matter movement. Voting is a crucial part of equity and inclusion, and companies have a valuable role to play in speaking out in support of policies that expand voter enfranchisement and opposing those that restrict it. Voting rights are seen by some as a win/lose game, and not surprisingly, in destructive conflict, warring sides oppose any idea if it comes from the other side. This is when a “third side” – which sees the opportunity and potential for a whole that is greater than the sum of the parts – can stand for larger principles and courageous choices.

For better or worse, now that public polls show corporate executives to be more trusted than politicians (though trust in all institutions has declined), it falls to corporate leaders to help rebuild the foundations of our institutions before they become frayed beyond repair. As Microsoft recognized with the launch of its Democracy Forward Initiative, there is a critical need to invest in preserving and promoting representative democracy and its foundational institutions.   

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The era of CPR is going to require a more proactive role than most business leaders have historically thought was their job. They are rightly anxious about appearing politically partisan in a world that has become hyper-partisan. After all, some conservative pundits were quick to accuse companies that stood with the Black executives of supporting a liberal “Big Lie,” as if standing up for voting rights was equivalent to the baseless claims of “the steal” – debunked in over 50 lawsuits – that culminated in the attack on the U.S. Capitol on Jan. 6. To keep their bearings in the face of such winds, companies must ground their political engagement in support of fundamental principles, not political ideologies. 

The good news is that such principles exist. Many companies have already begun coming to grips with them as they have worked to articulate a corporate purpose greater than profit-maximization. Principles such as sustainability; a long-term perspective; support for inclusive, accountable and participatory institutions; and equal opportunity for all regardless of race, gender, religion or sexuality. Principles such as impartial political processes that eliminate gerrymandering and ensure equal representation, regardless of which political party one supports. One need look no further than the United Nations’ Sustainable Development Goals, which many companies have already committed to support. 

Politicians must stop using their power to choose their voters and instead come up with ideas that will convince a majority of voters to choose them. In these polarized times, corporate leaders are called on to stand up for equal opportunity, and for a system of representation that honors all voices equally regardless of race. These are principles that are easy to explain to Americans and that are essential to rebuilding trust in our political system.

Voting rights is just the start. Business will need to play the third side on a range of looming issues — from climate change to privacy, education, social justice and economic opportunity. For every one of these issues, businesses can expect to be pressed to develop their corporate political responsibility strategies. Far-sighted leaders will use this as an opportunity for practice.

Thomas P. Lyon is the faculty director of the Erb Institute for Sustainable Business at the University of Michigan, which recently launched the Corporate Political Responsibility Taskforce.