Political engagement traditionally has been viewed as a no-win situation for a public company or a public company chief executive officer. In a sharply divided nation, taking sides on a controversial topic can instantly alienate half of a company’s stakeholders, from investors and customers to suppliers and employees. These days, however, silence can also be viewed as a political statement, which places public companies in a difficult position. While the incursion of sociopolitical issues into the business world has slowly gained momentum over the last decade, it has recently accelerated due to major societal upheavals, high-profile foreign affairs and trade issues, and an election cycle like no other, all in the unrelenting spotlight of 24/7 news and social media. At the moment, corporate America is under pressure from many directions and is widely viewed as a potentially powerful—albeit reluctant—agent of sociopolitical change.

The answer to the question of how a corporation can successfully handle political pressures may be found through a focus on corporate purpose. It is incumbent upon each company’s board of directors and management team to understand the company’s own raison d’être, to have a clear sense of the solutions it proposes for the problems of the world. A corporate purpose can inform and guide decisions as to which political issues are relevant and how they should be addressed. A clearly expressed statement of purpose can also unify leadership, employees, investors and other stakeholders behind initiatives that are aligned with the company’s role in society. The lack of such unity could undermine the effectiveness of company leadership and render political action and engagement ill-considered and self-defeating.

Pressure Toward Politicization

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