Plenary Session – The Corporation and Politics

CEO and corporate activism–the practice of CEOs taking public positions on social and political issues not directly related to their business–has become a hotly debated topic in corporate governance. How should a board respond when a traditionally political question suddenly becomes a matter of corporate policy? Should CEOs and boards take positions on matters as diverse as voting rights legislation, gun safety laws, immigration, content control (for media platforms), gender issues, geopolitical conflicts, and presidential politics? After the last U.S. presidential election and the events on January 6, many corporations halted their political giving or made permanent changes to their approach. As we approach another presidential election in an increasingly polarized environment, how should corporations handle political contributions? Even when corporations are not taking political positions, they have to navigate sometimes impossibly conflicting demands from employees, customers, investors, and state governments around Environmental, Social, and Governance (ESG) matters. Some states legislate against ESG initiatives as manifestations of an anti-social “woke” agenda. Other states take the opposite view and mandate respect for ESG initiatives that are elsewhere prohibited. How can boards address the disparate concerns coming from investors, employees, and customers, while navigating various state laws and the possibility that state governments may retaliate? When and how should corporations be proactive in confronting these challenges and when should they lie low and be reactive? This session will present a framework that boards can use to assess the pros and cons of corporate advocacy, and discuss how boards can be prepared to respond to resulting criticism in the face of companies or CEOs taking public positions or remaining silent.