Should business leaders speak out more on public issues?

Business leaders are among the most powerful people on the planet. At the helm of huge corporations, with billions of dollars of assets to leverage, their decisions have a profound influence on all of us. At the same time, however, those very same business leaders only very rarely seem to speak out on many of the public issues that actually affect us.

Consider when the former Toronto Mayor Rob Ford was engulfed in a crack-smoking scandal that put the city in the headlines for all the wrong reasons. The response from the city's business elite was a deafening silence. Nonetheless, the scandal must have prompted considerable anxiety among business leaders about its effect on the business and investment climate of Canada's largest city.

Are CEOs right to hold back in such instances or should we expect them to take a more prominent position in public debates? There are no black and white answers to this; it largely depends on context. So here are four things to consider when deciding whether the silence of business leaders in good thing or not. And if you want to dig deeper, check out The Guardian's live chat on "Should business leaders speak out more on public issues such as climate change?" on Wednesday 5 August 2015, 1-2:30pm BST.

1. Some social issues face a leadership vacuum that business leaders can help fill
Earlier this year, a group of 43 CEOs of major multinationals signed a open letter urging governments to strike an ambitious climate deal at COP21 in Paris, Likewise, the CEO of the biggest oil sands producer, Suncor, recently called for more stringent climate regulation, including a high price on carbon.

These announcements, unthinkable even a decade ago, give at least some indication of the kind of muscle that business leaders might be able to flex in filling the great big hole in leadership around climate change. Quite simply, such signalling from the business community helps empower political leaders to do their jobs better.

Of course, if these CEOs had spoken out saying that no action on climate change was needed (despite all the evidence to the contrary), as indeed has happened in the past (most notably from successive Exxon-Mobil leaders), we would be bemoaning the addition of their voices into the debate. So it's a double-edged sword, with substantial risks as well as opportunities.

2. Hypocrisy won't work
There is a tendency to criticize business leaders for making pronouncements like these because their actions do not always match their impressive sounding words. Richard Branson for example, was branded a hypocrite by Naomi Klein for failing to follow through on his promise to divert $3bn of Virgin's revenues to developing biofuels and other clean energy projects.

"Greenwashing", as this is known, can be a major problem when companies and their leaders go public with grandiose plans that they either cannot deliver on, or that they actively undermine behind the scenes with lobbying and back room deals. Business leaders already face a major trust deficit when it comes to their credibility as spokespeople. Survey after survey has confirmed that CEOs and business executives in general are not trusted as a credible source by the public. So any attempt to hoodwink the public is unlikely to work, not least because most of the public don't believe them in the first place.

3. Aspirational talk isn't all bad
For all the problems of greenwashing, business leaders making aspirational statements about social issues shouldn't automatically be criticized. For one thing, in the context of challenging, complex problems, it is often imperative that business leaders do go outside their comfort zones and articulate "stretch" goals that they can not necessarily know if or how they can achieve. Consider Interface Carpet's mission to reduce their waste to zero by 2020. When they started their 'mission zero' journey in 1994, former CEO Ray Anderson did not have a plan for how this would be realized only that he needed to set a vision that was inspiring enough to galvanize the entire company. Since then, Interface has cut waste to landfill by more than 90% and GHG emissions per unit of production are down almost 75%. The company is rightly lauded as a sustainability leader that others should follow. The lesson is that there is scope for business leaders to be aspirational but sooner or later they need to back up their words with sustained action.

4. There is surprisingly little risk attached to CEOs speaking out personally on issues not directly connected to their company. 
Business leaders rarely take the plunge and speak about public issues not directly tied to their business. Despite being smart, influential people used to tackling complex problems, they are usually either too busy or too concerned about prompting a backlash to say publicly what they think about such issues. The silence really is deafening. But according to unpublished research conducted at the Schulich School of Business last year, when CEOs do take the plunge, there is rarely any kind of negative media response. Looking back over a number of years across a range of issues such as Obamacare, same sex marriage, the fiscal cliff, the Rob Ford scandal and the proposed Quebec secular charter, the mainstream press reaction to the rare instances of individual CEOs speaking out has been largely neutral. This suggests that corporate leaders may well be overestimated the risks associated with speaking out on public issues, especially those where their own self-interest is less obvious.

The bottom line is that business leaders could probably be part of the conversation on a whole swathe of public issues. But if they are to participate, it has to be in the right way, and that means three main things: a) transparency about what their company stands to gain or lose with respect to the issue (i.e. is it a matter of self-interest or not?); b) clarity about what they or their company is doing or planning to do to address the issue (i.e. are they open to a charge of hypocrisy?); and c) a willingness to encourage others, especially those without such power and influence, to also participate - and to engage fairly in the unfolding debate rather than seeking to dominate it. It's a tall order. But if nothing else, it might help earn back a bit of that trust in business leaders that is so sorely lacking .

Photo copyright Onewaystock.com. Reproduced under creative commons licence

Rob Ford should stay

Toronto, that once sleepy capital of Canadian business, ‘New York run by the swiss’, a city widely seen as boring and ugly (esp. compared to its once-competitor Montréal) – has made global news: A crack smoking mayor! Match that, London, New York or Berlin! All the mainstream media here (and globally) are pretty unanimous in their call for Rob Ford’s resignation, or at least for him taking a break.

That in itself is a reason for suspicion. In my business ethics course this week I had a vivid exchange with my students. We were discussing discrimination and how it is unethical to apply criteria such as race, gender, sexual orientation, recreational habits etc. to job qualifications and hiring. On that note, calls for Ford’s resignation are not very convincing. After all, on many accounts, he has done a good job as Toronto’s major. The city’s finances are healthy; public services are running smoothly, key infrastructure projects, such as the construction of new subway lines have finally taken off; and the major successfully tamed the beast of an otherwise dysfunctional federal/provincial/municipal layered bureaucracy to get even more public infrastructure projects off the ground. This alone, in a city whose infrastructure is stuck somewhere in the 1970s, is reasonable ground to consider him a success on his job.

Of course, there were other things in the past, where arguably Ford violated the terms of his job. Toronto Star investigative reporter Daniel Dale – a former student of us - digged out a number of occasions where the mayor took advantage of his role for personal issues. But nothing really stuck.

As much as some have made an ethical case here against the mayor, I do not think these arguments really touch the heart of the controversy.

Two things spring to mind to any reflective observer. First, much of the vitriol directed at Ford in my view is just based on the persistent WASPy (as in White Anglo Saxon Protestant) subculture of North America. Ford likes to use recreational drugs, has all the wrong, politically incorrect friends and, yes, is probably an alcoholic. Mind you, at least it was not about sex. But in some ways his fate resembles the one of Bill Clinton or Elliot Spitzer: Ford does not live up to the public morality and style, which is deemed politically correct in Canada. It is worth noting that although possession of crack is illegal in Canada, the lack of concrete proof (in terms of physical substance) means that prosecution is unlikely. But the fact that Ford admits to it in public and simply continues with his job just infuriates all those who either have succumbed to this pubic consensus of stuffy morality or otherwise suppress it and live it out in private. After all, Canada’s alcohol consumption is twice the global average and him talking about his ‘drunken stupors’ as a regular occurrence probably just represents an average recreational practice in this country.

Little surprise of course, that much of the hunt on Ford – representing the right wing Progressive Conservative Party – is coming from the ‘liberal’ press here. It not only shows how small ‘c’ conservative even Canada’s liberal elites are but also reveals that all those who hated Ford as a mayor to begin with now take whatever moral resource as their disposal to finally finish him off.

This points to a second observation. Rob Ford epitomizes the aches and tensions of a country which has been the most relaxed and forward looking in terms of immigration. His constituency are the ‘905ers’ based on the area code of Toronto’s suburbia. That is also where he is from. These are mostly people with a first generation immigrant background coming from south and east asia. The other lot,  who hate him and are currently fanning the flames of ousting Rob Ford are the ‘416ers’, those who live in the core downtown of Toronto. None of them voted for Ford and they never felt represented by a fat, white, uneducated, loud bloke from the suburbs.

Ford’s approval ratings have soared in the aftermath of him admitting his drug use. This is no surprise. He represents people who struggle to make ends meet; who are sick and tired of commuting to work in a city with the longest commuting time by far; who get little kick out of taxes being spent on things that do not relate to their everyday struggles; and who know from their own experience that fighting your way out of, say, Bangladesh to Brampton (a 905 suburb) – yes – takes determination, hard work and not too much concern for what their then constituency back home thought of them. Rob Ford, the small time entrepreneur, in his stubbornness just represents them.

So what does this amount to? On day one of his election I thought Rob Ford was a disaster. Mostly because I believe in Toronto’s potential as a great global city that deserves a mayor of a different stature and outlook. But at the same time I also believe that a mayor has to represent the city that voted him in. And boy, Rob Ford fits that bill. So rather than trying to get this ugly representation of what Toronto actually looks like out of sight, the real smart reaction to this scandal would be to say that Rob Ford – with all his preposterous faults – is the one that the people of Toronto chose to represent them. So lets allow him to continue to represent us. And if we don’t like what we see - until we can vote him out - maybe we find the courage to address the underlying issues. Rather than killing the poor guy who currently just displays them.

DM

Photo by Eric Parker, reproduced under the Creative Commons license.