Wading Into the Culture Wars, Corporations Fortify Themselves with ‘Social Issues Working Groups’
When Hamas launched its attack against Israel last week, the mobilization that followed was not only a military one, but a corporate response as well. Global businesses moved swiftly to protect their employees in harm’s way, sending workers home, donating medical supplies and food, and setting up relief funds. Many also made public declarations of their position on the war. “We stand with our employees, their families and the people of Israel during this time of great suffering and loss,” said JPMorgan Chase CEO Jamie Dimon. Condemning the war but acknowledging that the underlying conflict is politically fraught, Goldman Sachs CEO David Solomon told employees in a memo: “The dynamics in the Middle East have always been difficult and complex. But these attacks are terrorism and violate our most fundamental of values.”While the attack was a tragic surprise, the phenomenon of corporations being compelled to take a stand on complicated issues, both at home and abroad, is becoming almost routine. In handling these situations, the stakes can be high. Household brands with solid reputations–like Disney, Bud Light, and Target–can be suddenly cast in a different light among large groups of stakeholders.Corporations now see these spectacles as major risks to be prepared for, like natural disasters, so many of them are creating a new kind of corporate function that brings together leaders from multiple departments including HR, communications, and diversity, equity and inclusion (DEI). The emerging role is the “social issues working group,” which can go by different names but is essentially a way to pull together an organization’s experts to anticipate emerging issues and help the company formulate the best possible response when situations escalate and headlines break out.How do they work in action? When the Human Rights Campaign issued an emergency declaration this summer following a wave of anti-trans legislation in the U.S., the accounting firm Baker Tilly was quick to consider its employees’ safety. Their advisors travel all over the world, including to states where anti-LGBTQ+ sentiment was deepening, so the company convened its Societal Issues Management Working Group, a cross-functional team of representatives tasked with responding to social issues.“Our first task was to send a note to our LGBTQ+ team member network, Pride, to let them know that we were aware of the emergency declaration and how we aimed to respond,” Shane Lloyd, the group’s leader, told From Day One. “Our second task was to update our travel policy to include information to allow our team members to ascertain travel risk as a component of their planning. Our last task was to inform our leaders to ensure they were aware of how to support team members who raised any safety concerns surrounding work-related travel.”The response was swift: The team had already been monitoring public events, and the infrastructure to care for its employees was well established since forming the group in 2022.Both consumers and employees have come to expect companies to weigh in on a wide range of public events and socio-political issues – like voting rights, climate change, racial equity, pay equity, support for the LGBTQ+ community, and reproductive healthcare access – a plethora of issues that have become politicized enough to divide people into principled, even enraged factions.But highly public fiascos have some companies approaching such matters with caution. In every corporate blunder is a cautionary tale about how to engage in this kind of discourse. The goal of these new task forces is to prevent public backlash and respond quickly, thoughtfully, consistently, and firmly. Here are some guidelines for how they operate:Approach Social and Political Matters with CautionMotivating corporate involvement in public matters is what Wharton School of Business professor Stephanie Creary calls “‘social authorization,” or outside forces that license a company to take action on an issue. It’s what spurred Nike to back pro football player Colin Kapernick in his protest against racial injustice and Gillette to run an ad campaign espousing the values of the #MeToo movement.Social authorization has been an especially motivating force since the summer of 2020 – when workers and consumers looked to businesses to change the way they interact with society amid racial justice movement and the spread of Covid – but responding to external pressure is not without complication, risk, and incredible stress on the part of corporate leaders. Some that have waded into the unpredictable waters of socio-political discourse have faced an angry public, and it has cost them the trust of their employees and their customers. In 2021, Georgia-based companies Delta Air Lines and the Coca-Cola Co. faced pressure from both the left and the right to take a firm position on a state voting rights bill. When the companies publicly opposed, Senator Marco Rubio accused them of being “woke corporate hypocrites.”Companies that pledged to cover abortion access following the Dobbs decision in 2022 were caught in both the culture wars and legal battles.In April, when Bud Light sponsored one Instagram post and one Instagram story from Dylan Mulvaney, a transgender social media influencer, the brand’s partnership with a member of the LGBTQ+ community enraged far-right Bud Light drinkers, and the demographic vowed to boycott the beer in videos encouraging violence against queer people. In response, Anheuser-Busch’s CEO Brendan Whitworth released a public statement distancing the company from Mulvaney, betraying the trust of the LGBTQ+ community and its allies. In June, retailers Target and Kohl’s were caught in a similar battle over the display of Pride Month merchandise.In July came a precedent-shattering case that employers are still processing: the Supreme Court’s decision ending affirmative action in higher education. Thirteen state attorneys general responded by sending a letter to CEOs, warning them against using DEI in hiring decisions. The corporate landscape is riddled with mines. In attempting to save face with one segment of consumers, companies alienate another and become entangled in a war between cultural, social, and political opinions.Take a Position and Stand FirmlyAlison Taylor, clinical associate professor at New York University’s Stern School of Business and the author of the forthcoming book: Higher Ground: How Business Can Do the Right Thing in a Turbulent World, believes that some CEOs lean on public statements only to stave off reputational risk. Executives often feel pressured to take on political matters for PR, responding to the loudest agitators on social media. The result is often shallow and poorly coordinated positions.Taking a position and then reneging, or even gently backing away, is how companies get in trouble, Taylor told From Day One. “It’s not necessarily that you made the call in the first place and experienced the backlash. It’s if you then look like you have no moral compass, and you’ll respond to whoever’s yelling at you – that’s how you make the situation worse.”Some companies choose to stay out of politicized issues to avoid being accused of “virtue signaling,” or paying lip service to vulnerable groups for the PR boost, which is what happened to many companies that made public statements about systemic racism in 2020.Increasingly, employees and consumers expect employers to enter public discourse on thorny matters. Public trust for business is greater than its trust for NGOs, government, and media, according to Edelman’s latest trust barometer report. And though trust for businesses is highest, people say they still want more involvement from businesses on issues like climate change and economic inequality.Yet the public is obsessed with corporate hypocrisy, said Taylor. Once a position is taken, that position must be defended. “You’re going to have to answer questions about political spending and decision making and your internal commitments. It’s very dangerous to say something about the end of Roe v. Wade if you don’t have a robust diversity strategy and you’re not providing reproductive rights.”Though there is some debate about whether rage against corporate involvement is damaging to businesses long-term, ABC News reported that after months of dipping sales, Bud Light lost shelf space at retailers like Walmart and 7-Eleven, “demonstrating the longevity of an anti-trans consumer movement that erupted in April.” In July, the company laid off roughly 380 workers. The drama surrounding Target and Bud Light led the Wall Street Journal to write in June that “companies that embraced social issues are having second thoughts.” But many leaders aren’t having second thoughts. The people who lead DEI and ESG initiatives do so often because they care deeply about these issues.Those who don’t want to stand back are steeling themselves before backlash happens, even before newsworthy events occur, with their newly emerging social issues working groups designed to respond to public events quickly and consistently. Don’t Wait to React. Anticipate Controversy as It BrewsIn 2021, the consulting firm Deloitte set up the Responsible Business Practices Working Group, a cross-functional team of 20 representatives from across the company – including HR, DEI, the general counsel’s office, risk, crisis communications, client services, government relations, and from Deloitte’s foundation.“We make sure that we take care of our people first,” Deloitte’s chief purpose and DEI officer Kwasi Mitchell told From Day One. “Be that through specific evaluation of our policies or outreach to those communities directly. We also think about the people who have been impacted in society, so we might make a donation to an organization that is helping those directly impacted. And lastly, we are thoughtful with respect to our communications with our employee resource groups that may be impacted.”Though they are prepared to be reactive, the hallmark of social issues working groups like Deloitte’s is that they are proactive, ever-studying what’s going on in politics, social matters, health, and law. If you’re not working this way, said Mitchell, it’s easy to fall into traps that so many companies do.“We have not been in any situations where someone can say ‘We didn’t think about that,’” said Lloyd at Baker Tilly. “I like the emphasis on process, because there’s an assumption that companies are responding to all manner of societal issues.” But it’s impossible to respond to every controversy, he said. There’s enough going on in the U.S., and multinational companies will be pulled in all directions.Lloyd, who is also the company’s head of DEI and societal impact, believes that some issues that have been highly politicized still require a company to take a stand. Earlier this year, the company sponsored a report by the think tank Coqual about gender in the workplace, which specifically addresses the physical and psychological safety of transgender people.Devise a Repeatable Process for Responding to Every Issue and EventDeloitte’s process is rigorous as well, a five-question framework adapted from a Harvard Business Review article: What would our internal stakeholders think? What would our external stakeholders think? What is the overall cost to society? Would the company’s core values be challenged if we did not act? And finally, can we actually influence the issue? The question of influence is one corporate leaders are grappling with. The expectation that businesses will involve themselves in public debate is still new, and many companies are still trying to figure out how, and if, they have the weight to change anything. “When you think about the history of business and the history of separating business from societal issues, the fact that companies are starting to hire someone called a director of employee activism helps us to understand that this is a tide that is turning,” Wharton’s Creary said in a 2022 interview. There are matters to which Deloitte has chosen a light touch, like voting rights. The team decided that it might sign a public letter or make a donation, “but we haven’t put the infrastructure in place to impact that issue longer term.” Mitchell learned through multiple surveys that politics is a topic Deloitte employees prefer to leave outside the office, so their involvement in political matters has been lean.In considering an issue, Mitchell’s team answers each question in the HBR story and awards an overall score, then debates the course of action with the CEO. With a diverse group and systematic analysis, they present better proofs for their decisions. “As we analyze things and put it in front of our CEO and his core leadership team, they can see that we brought the full perspective of the firm,” he explained.That formula seems to leave most people satisfied with the process, even if some don’t get the result they hoped for. At least everyone feels heard and there is consensus reached on how the decision was made. “What’s been really interesting is that people say, ‘I don’t necessarily agree with where we landed, but I understand where we landed,” Mitchell said.He estimates the team has worked on 40 or 50 topics over the last two years, including voting rights and reproductive rights. Before the working group was formed, Mitchell said opinions came from all directions, and it was difficult to understand if it was a reflection of the whole community, or just a vocal minority. “You also have a fair number of people who don’t feel that empowered, who might have a distinct [point of view] who would not necessarily elevate that to leadership right away.”Take a Position You Can Support Inside and Outside the OrganizationThat these groups are cross-functional indicates maturity in corporate coordination. Corporate America has developed dozens of functions – PR for messaging, HR for culture, government affairs for lobbying – but it’s a mistake to separate these functions, said Taylor. “If you’re going to commit to something like transgender rights, then you’ve got to be prepared to reflect it in your culture, your HR decisions, and your leadership. If you’re being discriminated against, it’s not just political, it’s personal. It’s about culture. It’s about HR. It’s about political spending. It’s about values.”Look for Outside Help When You Need ItWhile some companies assemble internal teams, others look outside the organization to bolster response plans. One such organization is Open to All, a nonprofit coalition of businesses that commit to inclusion of all people.Calla Rongerude, Open to All’s managing director, estimates that one-third to one-half of Open to All members have internal DEI councils, but attrition in DEI teams has driven leaders to their organization. “DEI budgets are shrinking, roles and departments are shrinking, and so are resources both in staffing and budget, but then you have this really heightened, polarized political environment. I’ve been working on nondiscrimination for almost 20 years, and I’ve never seen it this volatile before,” she said.Open to All is set up to act quickly. When a new law is passed or a Supreme Court decision handed down, the organization assembles its policy contacts to brief members on the implications and dispel bad information stirred up in the chaos.“We also have our coalition of nonprofit organizations that can come in when there is a big moment – whether it’s Pride backlash, anti-trans legislation, affirmative action, or Dobbs – and talk about how companies can meet the moment,” said Rongerude. “They’re not just guessing in a conference room. They can actually talk to people who are doing this work on a public policy level.”Members of Open to All come together for purpose, setting aside business matters. “We have Gap and Levi’s and American Eagle. They’re all selling jeans, but when they’re working with us, they’re talking about how they can revamp their loss prevention policies so they’re eliminating bias at the returns counter. They put the competition aside.”Acknowledge the Limits of Social Issues Working GroupsAs effective as these task forces can be, and as reassuring it may feel to have one, there are limits. A social-issues working group can’t eliminate risk, Mitchell is emphatic about that. “Large organizations will always wade into some aspects of risk with respect to the way they operate their businesses or how they respond to a specific issue,” he said. “What this group helps you do is be thoughtful on a wide range of the risks that you might wade into.”The processes these groups exercise produce confidence and consistency, Mitchell said. It compels the business to ask how its decisions will affect employees, clients, and public stakeholders. “We try to have it framed from all of those lenses, just to make sure that we’re consistent in our actions on a daily basis.”Emily McCrary-Ruiz-Esparza is a freelance journalist and From Day One contributing editor who writes about work, the job market, and women’s experiences in the workplace. Her work has appeared in The Washington Post, the BBC, Quartz, Fast Company, and Digiday’s Worklife, among others.(Featured photo by Leo Patrizi/iStock by Getty Images)
Emily McCrary-Ruiz-Esparza
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October 11, 2023
