The uncertain activism of Silicon Valley CEOs

Corporate social responsibility is making a comeback and CEOs have to lead the way according to surveys that show it is very important in retaining workers and customers.
Written by Tom Foremski, Contributor

Chief executive officers (CEOs) are being told to become activists and take a stand on hot-button issues because employees and customers won't stand for companies without meaningful leadership.

Surveys have shown that more people want to work at companies with activist CEOs and consumers are willing to buy more in support of activist companies.

Nearly two-thirds of respondents say they want CEOs to take the lead on policy change instead of waiting for government ... building trust (69 percent) is now the No. 1 job for CEOs, surpassing producing high-quality products and services (68 percent).

The 2018 Edelman Trust Barometer -- 33,000 people surveyed in 28 countries.

Weber Shandwick's KRC Research survey found a new form of consumer activism among US and UK consumers that it calls "BUYcotting" and it is replacing the activism of boycotting. More than 80 percent "agree it is more important than ever to support companies that do the right thing by BUYcotting."

KRC found nearly 40 percent of respondents said they expect CEOs to speak out publicly on major issues of the day.

Another KRC study found high levels of employee retention and advocacy at the companies that had good activist reputations.

Silicon Valley's tech CEOs have been activists but not around topics in the public interest. For example: Google/Alphabet spent over $18 million on lobbying -- the most of any company in 2017-- on issues such as preventing online ad legislation and trying to steer autonomous car laws towards its needs.

Mark Sullivan at Fast Company, reports:

Amazon spent $12.8 million ....on an array of issues, including delivery drones and online sales tax.

Facebook spent about $11.5 million ... on issues relating to Russia's use of its platform to meddle in the 2016 election, and to fight the impression that it's a publisher rather than a neutral internet platform.

Apple spent $7 million to educate lawmakers on the importance of strong encryption, and on tax reform and immigration.

Tech company activism around their favored topics of lowering corporate taxes and less transparency on online ad sales -- are not the type of activism that is going to inspire employees or rally passionate consumers around their brand.

So what type of activism can Silicon Valley CEOs get behind that will help them recruit and retain top professionals. And attract the loyalty of the activist-aware consumers -- the 83 percent in a KRC survey that "agree it is more important than ever to support companies that do the right thing"?

[Alphabet - Google's holding company adopted the motto "Do the right thing" in 2015.]

A return to corporate social responsibility...

Google certainly knew what the right thing to do was in 2004 when it filed for its IPO. The first page was a letter to shareholders in which the Google founders explained that their goal was not profits but to do good, to make a difference in the world. Google understood that social corporate responsibility was very important in recruiting software engineers back then.

If the Edelman and Weber Shandwick/KRC surveys are right -- we should see a return to corporate social responsibility. The issue is: around which issues? Most tech CEOs have a serious leadership challenge in this regard because they don't want to be confrontational -- a key activist quality.

Marc Benioff, head of Saleforce.com, San Francisco's largest tech company, has set an excellent example of a business leader that has managed to do a great job in publicizing all the good works that he and his staff have achieved, from helping local schools, to building a large Children's Hospital in San Francisco. But his example has not been followed by others despite all the many years of work.

When it comes to taking a stand on hot-button issues -- the most important for the survey takers -- there is widespread timidity by CEOs. They have been trained to stay away from talking about hot-button issues, and not to speak publicly on contentious issues.

CEO culture won't be changed easily or rapidly especially since the Harvard Business Review (HBR) notes there is little known about the long term effects of CEO activism.

The trend of corporate leaders taking a public stand on issues not necessarily related to their businesses is relatively new, so there's little empirical evidence of its impact. But we do have limited anecdotal evidence that it can shape public policy--as it did in the case of Indiana's RFRA [Religious Freedom Restoration Act]

- The New CEO Activists

The topic itself is very hot. HBR writes, "PR firms are now building entire practices around CEO activism."

Foremski's Take: The activist CEO will be rarely spotted despite the best efforts of some of the largest US PR companies to move them to action.

Social corporate responsibility used to be important in Silicon Valley but over the past 15 years it has virtually disappeared. Yet tech companies have still managed to recruit top engineering talent and consumers haven't complained outside of the recent PR company surveys.

Doing nothing is less risky than taking a stand. Silicon Valley activist CEOs will continue to be members of a very small club, imho.

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