Should companies speak out about difficult social, political or environmental topics? If so, when? What does it mean for a company to ‘take a stand’? What are the risks to voicing a view? And how can companies position themselves as responsible – and responsive – in a complicated world?
These were just some of the questions framing a fantastic event recently hosted by the Next Generation NED Network – and by the end of the discussion, we had approached some answers. The stellar panel was comprised of Rachel Hopcroft, Head of Corporate Affairs at KPMG; Lucy Parker, Senior Partner, ESG & Sustainable Business Global Lead at Brunswick; and Rachel Saunders, Deputy Director at the Institute of Business Ethics.
Businesses have externalities which society cannot afford
The discussion began with a recap of some of the global challenges which come to bear on us all – the climate crisis, social inequality, digital acceleration – and the different frameworks which govern action or inaction on these issues.
The world is, unfortunately, a long way from achieving the UN’s Sustainable Development Goals. Businesses have a role to play in the systemic change which is needed to address this achievement gap. They are not separate from the problems which we face but are a part of the world in which we live. Often, companies face public criticism not for what they do (make a profit by offering goods and services), but how they do it (with disregard for negative social and environmental impacts). Fundamentally, businesses have externalities which society simply cannot afford. Dealing with this requires them to speak up – and to take action.
In a society increasingly concerned with identity and impacted by the decline of traditional vehicles for community, businesses are being expected to step up to the plate and take a stand on complex political, social or moral issues. These issues are often mired in polarised debate, which can get companies into hot water. To avoid this, it is important for boards to consider carefully when, how and on what topics to speak out. As the discussion evolved, certain criteria emerged for being able to discern exactly this.
Rules of thumb: when to speak out
When deciding whether their company should weigh in on an environmental, social or political issue, boards can ask themselves:
- Does this issue have anything to do with us? Is it material or relevant to our operations?
- Are we doing anything about this issue already, and are we ready to do more?
- If we spoke up, do we have specific expertise to share and would we be adding anything to the discussion?
- Have we done anything wrong regarding this issue?
- Do we want to be proactive and get on the front foot of this issue – if it is central to our business?
- What are our competitors doing? If other people aren’t saying anything about it for now, how long will that last?
Rules of thumb: when not to speak out
Equally valuable as knowing when to speak out is knowing when not to. For their messages to be credible, authentic and helpful, companies should avoid:
- ‘Adding to the noise’ or saying something just for the sake of saying it.
- Being ‘baited’ into commenting on a topical issue – even if everyone else is.
- Speaking out on an issue that is not related to the company’s business model or that it is not doing anything about.
- Having several different spokespeople, each with their own views, which can dilute the message.
- Speaking out about too many topics all at once – this can lead to a lack of focused attention.
- Contributing to polarising the debate.
