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Corporate America's changing advocacy agenda

Corporate America's changing advocacy agenda
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CEOs of American companies, a group of (largely) white middle-aged men trained (principally) in business administration, finance or engineering, must now refocus their lobbying efforts to issues they usually prefer to avoid.  

Historically, corporate lobbying has focused on issues such as tax cuts, securing business favorable provisions in appropriations and trade bills, and avoiding regulations that soaked up capital budgets and added to administrative expenses.

In the wake of America’s ongoing social upheavals, corporations are now besieged with demands to repurpose their considerable lobbying power to advance opportunities for women and minorities, support climate change controls, expand civil liberties for LGBTQ+ citizens, reduce inequality and protect voting rights. Trained to achieve maximum shareholder value calculated through financial performance metrics, CEOs now face a growing need to adjust their thinking through on-the-job re-schooling at a time of rapid change within society and even their own organizations.

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What factors are driving these demands for change? By 2045, less than 50 percent of the U.S. population is projected to be white. As this trend ripples across American society, it already has begun to further diversify the American workforce (although management level jobs and appointments to corporate boards represent lagging indicators). Nowhere is this development more evident than in recruitment and retention of much-coveted early career employees. According to Glassdoor, 76 percent of employees and those looking for work (including Millennials and Gen Zers), said a diverse workforce was important to their evaluation of companies and employment offers. As companies’ work forces become more diverse, management is more attentive to their values and aspirations.  

Companies prefer to assiduously avoid challenges to their brands from social issues they regard as peripheral to how they make their money. This thinking has become less viable when stakeholders and customers increasingly drive the social media agenda. In contrast to ongoing political dysfunction, public confidence in business performance has risen. According to the 2021 Edelman Trust Barometer, the private sector is now viewed as the only institution within society that is sufficiently competent and ethical to address large scale issues. Many asset management firms have also concluded that poor management of social challenges represents a major risk to investors. The largest of these firms, BlackRock, recently announced that it will measure the diversity of corporate management and boards as a core metric of success.

Pressures to reshape corporations’ advocacy agendas have accelerated during the past decade. Highly visible issues — rallying corporate support for the 2015 Paris climate agreement, opposition to a 2015 law in Indiana denying services to same-sex couples, advocacy against a 2016-2017 North Carolina law that banned transgender people from using public bathrooms that matched their gender identities, high profile CEO dismissals at CBS, HP, McDonald’s and the Weinstein Group for inappropriate sexual conduct, calls for corporate endorsement of Black Lives Matter in the wake of the deaths of George Floyd, Breonna Taylor and other people of color, and growing pressure to actively oppose voter suppression in Georgia and 47 other states — have established a baseline for measuring future corporate behavior and engagement.

CEOs continue to struggle with such expectations and generally prefer to avoid visible and contentious social issues. There is, however, a cost to delayed engagement as evidenced by the recent public reversals of Delta Airlines and Coca-Cola, following severe criticisms from civil rights groups that they were insufficiently clear and aggressive in expressing an early opposition to the recently enacted voter suppression statute in Georgia.

How should corporations manage their participation in social advocacy? To begin, they should initiate early engagement with stakeholders across their range of brands to understand external perspectives. Companies should implement formal plans with specific deadlines to further diversify their boards, management and workforces. They should build partnerships with stakeholders as a means to obtain a deeper understanding of social problems and co-develop solutions. Corporations should update their political contributions’ policy to avoid giving money to groups that seek to undermine democracy or resist a more diverse, equitable and inclusive society. And they should not wait until a political or social crisis is underway to make their voices heard. Corporations cannot solve these societal challenges alone, but their influence has high impact and, in combination with others, is often determinative.

Dr. Terry F. Yosie is the former CEO of the nonprofit World Environment Center and previously served as a senior non-lobbying executive in the chemical and petroleum industries. He lives in the District of Columbia.