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The cost of silence: Why more CEOs are speaking out in the Trump era

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After receiving an honorary doctorate at the University of Glasgow recently, Apple chief executive Tim Cook took questions from the capacity crowd. The first student had two for the leader of the world’s most profitable company. He wondered, to laughter, whether he could have a job. And then he asked about Apple’s “next big thing” — not just as far as products, but “in terms of activism.”

Cook said he doesn’t view himself or Apple as an “activist,” casting the company’s battles over privacy rights or its opposition to President Trump’s immigration order in moral terms about right and wrong. Just before that he had invoked Martin Luther King Jr.’s famous quotation about the problem with “the appalling silence of the good people.”

Yet more and more, consumers and employees are like that student in Scotland, expecting the companies they buy from or work for to take a stand on social issues. And increasingly, CEOs are responding.

American companies have emerged as a force for social change in recent years and are among the most vocal critics of the new president’s executive order to temporarily ban migrants from seven Muslim-majority countries.

‘Deeply concerned': Corporate America responds to Trump’s travel ban

In the days after Trump’s travel ban was issued, more than a dozen top executives at rival companies in Silicon Valley, including Cook, Tesla’s Elon Musk, Microsoft’s Satya Nadella and Facebook’s Mark Zuckerberg, traded a flurry of candid emails to discuss the response, according to sources familiar with the discussions. In addition, more than 100 tech CEOs signed an amicus brief against the executive order, which a federal appeals court ruled would remain frozen; Trump is expected to issue a new immigration order.

On Thursday, Zuckerberg announced, in a 6,000-word manifesto, that he was reorienting Facebook toward issues that have a civic impact and build a global community — focusing on areas such as how the social network can improve safety during crises, and possibly changing the product to display a greater variety of political viewpoints.

Although Silicon Valley has led the opposition, companies as diverse as Chobani, Nike, Ford, Goldman Sachs and MasterCard all said they were against the immigration order or expressed concerns about it. More than 160 biotech executives blasted it in a letter published last week. Starbucks CEO Howard Schultz said he planned to hire 10,000 refugees in 75 countries over five years; he said that “we will neither stand by, nor stand silent, as the uncertainty around the new administration’s actions grows with each passing day.”

“There’s just nothing,” in scale or swiftness, that has compared to the corporate response to Trump’s entry ban, said Nancy Koehn, a historian at Harvard Business School.

A public stand against the president

Trump has billed himself as a businessman who could run the country like he does a corporation, and many executives have stood by him, promising new U.S. jobs, expressing confidence about his economic policies, or taking part in a parade of high-profile meetings at Trump Tower or the White House. Others have stood on the sidelines, fearful of inviting an angry tweetstorm from Trump, who can quickly stir a tempest that rattles their share prices.

Even so, Koehn noted that it’s highly unusual to see corporations take a public stand against a president so early in his first term.

“Go back to early labor law legislation. Go back to apartheid,” she said. “It’s really hard to find the public kind of drumbeat of this action, across these different kinds of organizations, in such a short span of time.”

As the calculus on whether it pays to stay silent or speak up rapidly shifts, the risks for companies can cut both ways. Speaking out can alienate consumers who disagree with the company’s views, as Starbucks saw when it faced boycotts from the right after Schultz’s refugee action. Audi drew fire when it took up the gender pay gap in a Super Bowl spot. On the other hand, ride-sharing company Uber faces a boycott from the left, with thousands of people deleting their accounts because they believe the company has not done enough to oppose the ban.

[Corporate America's embrace of gay rights has reached a stunning tipping point]

This spirit of activism predated Trump. Cook, like Schultz at Starbucks and Marc Benioff at Salesforce, has been outspoken on such issues as gay rights and racial equality for some time.

Such efforts galvanized around state-level gay rights issues. In recent years, companies signed on to legal briefs supporting same-sex marriage and added their names en masse to letters against state legislation that critics view as discriminatory toward LGBTQ groups. A few, such as PayPal and Deutsche Bank, even canceled planned business expansions in North Carolina over a bill that blocked transgender people from using the bathroom of their gender identity in government buildings and public schools.

In the interest of business

Business leaders have taken political stances in the past, but usually behind the scenes. Their more public statements today are not mere corporate altruism but often have an economic interest: Fears about changes in visa programs, especially in a tech industry dependent on them, have made speaking out a business imperative.

Meanwhile, the rise of social media, which can quickly mobilize large groups and are what Koehn calls “the lighter fluid in all this,” has put new pressure on chief executives to speak up or take action. Grab Your Wallet, a social media campaign, has pushed consumers to boycott the Trump family’s products.

“CEOs’ hands are being forced, by consumers, by employees, by the larger field of public discourse,” Koehn said. “Some of what is happening now is so controversial, and the stakes are so high, that business leaders are rethinking what it means to protect [their] brand in a new landscape.”

Aaron Chatterji, a professor at Duke University’s Fuqua School of Business who has studied CEO activism, says that what’s changed most over the past year is that staying out of the fray now has a cost.

“Silence used to be the default posture,” but political polarization, Facebook and Twitter have changed that, Chatterji said. “It’s a choose-a-side mentality. The middle is harder to occupy. And with the proliferation of social media, it’s kind of like a microphone that’s always on. If you’re not speaking out, it’s more conspicuous.”

That’s especially true for companies in the technology industry or that have a large swath of millennial workers, who are accustomed to expressing themselves, remain less loyal to individual companies and are skeptical of corporate America.

Brad Taylor, an engineer at San Francisco-based Optimizely, is organizing a walkout of tech workers on March 14 that he says is intended to send a message to business leaders and present a unified front against the immigration order. He said he knows people starting to look for other jobs after a CEO’s initial statement against the order wasn’t strong enough.

“There’s some irreversible damage,” he says. Before more chief executives began speaking out, friends told him they were “sometimes even embarrassed to say they worked at some of these companies” that had not made a public statement.

Of course, sought-after engineers — the ones a Silicon Valley adviser compared to “five-star college football recruits” — risk far less when they speak out. “Tech workers are in huge demand right now and constantly being recruited,” Taylor said.

Pressure from the front lines

Other tech workers are gathering signatures to urge their bosses to do more.

IBM engineer Daniel Hanley, 35, started a petition in November that now has more than 2,000 signatories, about 1,300 of whom have self-identified as IBM employees, according to Hanley.

An IBM spokesperson declined to comment about the petition. In an internal message to employees, CEO Ginni Rometty wrote that “some have suggested that we should not engage with the U.S. administration. I disagree. Our experience has taught us that engagement — reaching out, listening and having authentic dialogue — is the best path to good outcomes.”

Last week, three Oracle employees launched a petition that now has more than 800 signatures, urging the tech giant, which has not put out a public statement on the entry ban, to sign the legal brief.

One reason: They want to work at a company they believe reflects their views. “When I walk around and introduce myself as someone who works at Oracle, there are assumptions that can come back to me,” said Rachel Kane, 29, a sales representative who started the petition with colleagues Irene Scher and Lara Beers. They all recently joined the company. With fewer boundaries between work and home life, Kane said, “it’s nice to have your life and your beliefs, and your moral compass, be aligned.”

An Oracle spokesperson declined to comment on the petition.

Tech companies, in particular, are concerned about the Trump order’s direct impact on current employees, and also by potential immigration actions that could limit the visas the industry depends on to populate its ranks of engineers. The companies may also want to prove to consumers and start-up-minded recruits that they’re not losing the moral high ground now that they’ve become advertising juggernauts and have faced withering privacy challenges of their own.

The more tech giants “are perceived to be like the rest of corporate America, the more risk to them,” Koehn said.

[Starbucks promised to hire thousands of refugees. Critics want a boycott]

CEOs who advocate can also risk being seen by investors as distracted or becoming overexposed, lowering the impact of their message, Chatterji said. CEOs need to choose the “issues you’re authentically connected to, so you might have more influence,” he said. “People will take it much more seriously.”

In his remarks in Glasgow, Cook said Apple weighs in on issues where it feels it has knowledge or holds a strong point of view, such as the environment and human rights. When it does, he said, “we will stand up, even when our voice shakes.”

Consumers remain skeptical

Meanwhile, many consumers remain skeptical about the reasons behind CEOs’ activism. In a survey of 1,027 U.S. adults by the communications firm Weber Shandwick  last year, respondents named media attention as the top reason they thought CEOs spoke out. Just 14 percent thought they were getting more political because they wanted to leverage their influence for the broader good, and only 11 percent thought it was to “speak up on behalf of the company’s employees and customers.

Yet the report, titled “The Dawn of CEO Activism,” also found that people saw CEOs more favorably if they took a public stance on current issues — as long as the topic was related to the company’s business. (If it wasn’t, the numbers reversed.) A newly released survey from Weber Shandwick also found that 41 percent of global consumers and 46 percent of global executives said companies should express their opinions or take actions on issues; 20 percent of consumers and 32 percent of executives said they should not.

And research by Chatterji and Michael Toffel at Harvard Business School found that CEO activism can help shape public opinion on controversial social issues and increase interest in buying by consumers who favor the company’s point of view.

Companies have been funneling millions of dollars into diversity and inclusion programs as research underscores the business case for having more diverse teams, which improve decision-making and better represent a company’s customers. If companies ignore political actions that hurt certain groups, they undermine the credibility of those programs, making them ring hollow.

“If those values have any meaning, then they need to stand up for them,” said Craig Smith, chair in ethics and social responsibility at INSEAD Business School in France. “Something that started out largely economic is not just the economics anymore. It’s become part of the identity of the organization.”

That diversity commitment was tested as same-sex marriage fights made their way through the courts and state-level laws viewed by critics as discriminatory toward LGBT groups sprang up in state after state. Companies had an incentive to speak out to avoid the patchwork of state laws that can complicate their operations and limit employee mobility between states. But doing so also helped them appear more accountable to the diversity and inclusion programs they were touting internally, and dozens signed on against laws in such states as Arizona, Georgia, Indiana and North Carolina. In the latter state, more than 200 companies signed a letter to oppose the state’s so-called “bathroom bill.”

Companies “got their feet wet around LGBTQ issues,” said Beck Bailey, deputy director of employee engagement for the advocacy group Human Rights Campaign. “I think once they got to that place, they felt that same internal and external pressure of living up to their stated values” when it came to other groups. “In this day and age, there’s more, ‘Okay, then what are you going to do about it?’ ”

That’s exactly the sentiment Taylor says many tech workers have been pushing their employers to uphold in the weeks since Trump took office. Tech workers, he said, are lucky to have the choice of speaking out without fearing for their jobs. “Most of America doesn’t. So let’s use that power to hold our tech leaders to the ideals that they tell us about every day.

“They tell us they want to change the world,” he said. “Now’s our chance.”

Read also:

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Tech industry opposition to Trump travel ban escalates

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