Why companies should stay away from controversial social and political issues

Recently, companies have weighed in on social and political matters, from issues as diverse as Black Lives Matter and voting access to more recent stances on Florida’s Parental Rights in Education bill and abortion restrictions in Texas and Oklahoma. But should companies take a stand on such issues? Why are they doing so, and what might be some potential repercussions?

The New York Times in February reported findings from interviews with undergraduate seniors entering the workforce, as well as a recent survey of millennials, about their expectations of companies for whom they intend to work. Sixty-one percent of millennial workers surveyed preferred companies that take a stand on social issues and 49 percent said they would quit a job that didn’t align with their values. Furthermore, the most important value expressed by graduating seniors who were surveyed was diversity and inclusion — 71.8 percent stated it as a top priority.

These values translate into pressure being put on companies by their employees to take stands on social and political issues. For example, Disney employees reportedly pressured CEO Bob Chapek, who had been working behind the scenes to prevent Florida’s so-called “Don’t say gay” legislation, to publicly speak out against the law. Chapek did so, and apologized to employees for Disney’s prior lack of a public stance on the issue. But this public stance did not come without substantial backlash from lawmakers, who rapidly passed legislation to rescind the special tax district that Disney occupied in Florida since buying the land to build Disney World in the 1960s.

Why are employees demanding that companies take such stands, and why are companies doing so? Public relations firm Edelman, which compiles the annual Edelman Trust Barometer, contends that for many years, trust in American institutions has declined to the point where most people do not trust fundamental institutions such as Congress, the U.S. presidency, U.S. Supreme Court, and others. Indeed, the 2022 Trust Barometer characterized the country as being in “the cycle of distrust” and suggests that businesses step into the void left “by an incapacitated government.” 

Edelman reports that 64 percent of people think we can’t have a civil debate on issues because Americans have become so polarized, and that the most trusted institutions to which people now look are their employers. So, people want those companies to address the failings of other institutions in order to address these issues.

This response at first may sound positive — today’s young people are actively engaged in advocating for social good and compelling companies to take strong stances on social issues, filling the void left by declining trust in other institutions. But, in fact, it is a disaster waiting to happen. 

Although it sounds idealistic and perhaps good from the perspective of individual workers, collectively, this logically will lead to worse outcomes. If employees really want companies to take strong stances on social and political issues, and would leave companies that express a stance that doesn’t align with their own values, that means companies could end up with employees who all have the same views on issues. 

The real benefit of “diversity and inclusion” is that you interact with people who look and think differently from one another, holding diverse opinions on many issues, so that a company can represent the full spectrum of society and bring the benefit of that diversity to organizations and better serve customers.  

I would argue that companies can do more social good by not taking a stance on divisive issues. Instead, they should foster a healthy dialogue on issues among their employees, and potentially their other constituents such as consumers. Given that many people generally trust the companies they work for more than they trust other institutions, businesses are in a unique position to encourage balanced debate on contentious issues in a way that both sides can trust. But they can do this only if they refrain from taking a stand on one side or the other.

Most companies purport to value diversity and inclusion. Yet a company can be truly diverse and inclusive only if they include people of different political and social persuasions. This means having employees with views on both sides of difficult or controversial issues. Companies should recognize that the best way to make progress on these issues is to create an atmosphere that enables healthy discourse. They cannot make some employees feel uncomfortable, isolated, or afraid to speak out. Becoming a monolithic echo chamber of uniform opinion about certain social and political issues ultimately does not assist society in resolving complex issues.

Andrew Ward is the Charlot and Dennis Singleton ’66 Chair of Corporate Governance Professor of Management at Lehigh University. The views expressed in this article are his and do not necessarily reflect the university’s official position.