This article was first published in the May 2017 UK edition of Accounting and Business magazine.

Business leaders used to, well, lead businesses. Now running a large multinational corporation requires ‘politician’ to be added to the list of desired skills.

Perhaps not surprisingly, CEO activism – bosses speaking out on social policy not directly related to their company’s core business – has so far flowered most vigorously in the US (see also the feature on page 38).  

American CEO activism changed significantly in February this year when nearly 100 companies filed a court document – an amicus brief against Donald Trump’s policy on immigration. It was hard to ignore so many CEOs protesting against a recently elected president and arguing that immigration was good not only for their businesses but for the country as a whole. 

Previously, a small number of American CEOs had taken high-profile stands on social and legal controversies: Howard Schultz of Starbucks asking gun owners to refrain from gun-toting while ordering their latte; Apple supremo Tim Cook taking his home state of Alabama to task over LGBT rights; and Salesforce chief Marc Benioff addressing the issue of gender pay inequality. Meanwhile Dan Cathy of restaurant chain Chick-fil-A spoke of his opposition to gay marriage.

It is perhaps not surprising that none of the statements was greeted with polite applause or quiet nods of agreement. 

Before donning the activist mantle, CEOs should take note of US-based research by the communication giant Weber Shandwick. This suggests five key principles encompassing the risks they run and the rewards they could achieve:

  • CEO activism has support but does not always win the popularity vote. 
  • It influences purchase intent. The obvious is true: if people support the CEO, they will be even keener on buying the service or products. Disagree and they could be organising a boycott.
  • It tests company loyalty. The message is played inside the company as well as outside. CEOs who nail a particular colour to the mast may want to take some soundings on how employees could react before they pronounce. 
  • It raises questions over motivation. If CEOs do take a stance, they should explain why. They may be doing it out of altruism but they must expect their motives to be traduced by mainstream and social media.
  • It may divide generations – with ‘millennials’ being more favourable.

With the Brexit negotiations looming and the political stability of the UK under the microscope, British bosses could be called on to speak out more explicitly than ever before. However, they need to think carefully about the possible backlash if they weigh in on a controversial topic. 

In particular, CEOs and boards should always be aware of groupthink – coalescing around an idea rather than challenging or questioning. Just because a view seems obvious around a board table does not mean it will play out well with the wider stakeholder group. And what may make sense in the glass-plated HQ may seem like nonsense to retail customers with sharply different lifestyles and aspirations. 

Parts of belligerent Britain may not welcome ‘fat cat’ company bosses stepping into the public square and opinionating. But the UK faces a radical reshaping of the nation’s life, the body politic and the economy in particular. Business has a vital role to play in the next year or so, and its various voices must be heard. CEO activism? Bring it on. 

Peter Williams is an accountant and journalist