New Corporate Politics?

[ Posted Tuesday, June 23rd, 2015 – 17:04 UTC ]

Large corporations are getting more involved in politics. Whether that is seen as a good thing or a bad thing depends upon the political issue involved and the side the corporation takes (and, of course, the side you're personally on). Conservatives cheer when corporations take a stand on abortion, liberals cheer when a corporation stands up for gay or civil rights. But it does seem like we're entering into a new era of corporate political behavior, or (since they're apparently people now) perhaps "corporate citizenship" might be a better term.

Now, don't get me wrong. I'm not talking about corporate campaign cash, or at least not directly. I'm not talking about the effects of the Citizens United decision, to put this another way. I'm talking instead about a more subtle thing than the outright purchasing of politicians or super PAC groups. I'm talking about corporations acting for what are essentially moral reasons.

At times corporations politically act by filing lawsuits. Nothing wrong with that -- they've got as much right as anyone to have their day in court. The Hobby Lobby case is the most recent example of this, of course. The owners wanted to use their own sense of morality in their purchasing decisions for birth control, and the high court agreed with them (for better or worse). As they saw it, they were fighting for the freedom to operate their business without government dictating to them through laws they didn't agree with. But corporations have always had the right to sue, so although the case itself set an important (and, opponents say, a dangerous) precedent, it wasn't really anything tactically new on the political scene.

But in the past few months, we've had two instances of corporations acting in a new way -- or, at least, an old way with a new twist. Corporations are standing up for things in a different way, or at least a way that is more prominent than it has been in the recent past.

Earlier, we saw corporate influence in the decisions in two states -- Indiana and Arkansas -- to back off from laws that would have allowed discrimination against gay people to legally occur. Both states hastily changed the text of the law (or proposed law) to remove the most offensive passages. This was after heavy pressure from some corporate bigwigs (most notably, in Arkansas, this pressure came from Wal-Mart).

I should mention that this wasn't solely achieved by corporations -- there was a lot of pressure from advocacy groups and even sports organizations (notably the NCAA, in Indiana) to abandon the attempt to codify discrimination. But corporations calling up the governor and baldly stating "This will be bad for business in your state" was somewhat of a new phenomenon.

Corporations, of course, play states off against each other for their own benefit all the time. A corporate CEO might tease two or three states with the promises of building a new factory or distribution center, all the while hinting that the state which will win the new business (and all the new jobs) will likely be the one who passes the most massive tax giveaways for that corporation. This is in the corporation's self-interest, because it directly affects their bottom line. They set up a "race to the bottom" and then sit back and let the states fight it out.

But this is something different. A corporation telling a state (or a governor) that it's going to rethink their presence in the state because they disagree so strongly with a law they perceive as amoral is different, even if it does ultimately affect the corporation's bottom line to some extent or another. In a word, what the corporations are doing is turning the entire concept of a boycott on its head. Call it the reverse-boycott.

Boycotting businesses for moral reasons has a long and storied tradition in politics, of course. Boycotts can have all sorts of effects, depending on how successful they turn out to be. They can have no impact whatsoever, they can have a moral impact in the political debate (but without much difference to a corporation's bottom line), they can have a minor impact on sales, they can have a major impact on sales, or they can even (at times) put a corporation out of business. But the best possible outcome for a boycott is when the targeted corporation changes their behavior as a result. That's the whole point, after all -- economically punishing a corporation for perceived wrongdoing (moral or political) and getting them to not only see the error of their ways but also to make a conscious business decision to change course.

But boycotts are always, by definition, grassroots-oriented. The consumers band together and decide to take their dollars elsewhere, as a political statement. The purpose of any boycott is to change corporate behavior, whether the company being boycotted has "gay-friendly" days at a theme park (Disney, boycotted by the religious right) or treats their workers atrociously (table grapes and lettuce, boycotted to improve migrant labor conditions). No matter where the issue falls on the political spectrum, the point is to effect change in the boardroom.

Effecting change in government is different. Now, these efforts can also arise from the grassroots, such as the movement to boycott Arizona for the anti-immigrant "papers, please" law they passed a few years ago. Sometimes these movements are incredibly powerful, even on the international stage. The movement to divest from all investments in apartheid South Africa was an important part of the pressure put on that nation to change its racist ways. At the height of this movement, it caused not only large pension funds to divest their portfolios, but it also convinced some American businesses to dump their own investments in the country. So the pressure worked both in the boardroom (eventually -- it was a slow process) and in the targeted country (also eventually -- the divestment movement was an important part of change in South Africa, but it wasn't the only reason they decided to change, I should point out).

But now we've got businesses trying to jump out in front of the grassroots. Well, maybe that's being too charitable. There are, after all, many groups who have been trying to get rid of official acknowledgement of the Confederate battle flag for decades now. The corporations are a little late to the movement, in other words. They certainly didn't create the movement in any way -- I don't want to give them too much credit.

But they do deserve some credit. Nikki Haley, the governor of South Carolina, said a rather revealing thing in the midst of the flag debate: "I spend a lot of my days on the phone with CEOs, recruiting jobs to this state. I can honestly say I have not had one conversation with a single CEO about the Confederate flag." Haley is essentially admitting the power corporations have over government decision-making. One has to wonder if, in the days between the horrific church killings in Charleston and her announcement yesterday that she now supported removing the Confederate battle flag, Nikki Haley got a few phone calls from a few of her CEO friends.

Again, call this the reverse-boycott. Corporations standing up -- for moral reasons -- to an individual state, and informing the state that they're rethinking their involvement in the state as a direct result of the political position the state is taking. All those lovely, lovely jobs might just decamp to another, more morally-upright state, in other words. The corporation is, in essence, threatening their own boycott of the state.

This is the new twist on an old tactic. Corporate America has been learning, in the past three decades or so, that it behooves them to be a lot more inclusive than they previously were. Corporations were instrumental in recognizing gay rights, for instance (compared to governments, I should specify, to be absolutely clear), because at some point they realized that doing things like adding "civil union" health insurance coverage for their employees made it easier to hire and retain those employees. Bigotry became bad for business. Now, admittedly "corporate America" isn't monolithic -- this happened over time, and some companies were way out in front of others, it is undeniable. Still, corporate acceptance was an important rung on the ladder upwards to full and equal rights. This happened earlier (and just as gradually) over the subject of civil rights. Black people (and, later, Asians and Latinos) started appearing in advertisements, alongside the familiar white faces. Being inclusive was deemed good for business.

Along with those phone calls to the governors, though, there is one more aspect of what is happening right now worth bringing up. Stores like Sears and Wal-Mart suddenly announced they would halt selling all merchandise with the Confederate battle flag on it. This trickle soon turned into a flood, as they were joined by Amazon and eBay and Kmart (and, doubtlessly by the time you read this, many others). This wasn't direct influence, as when the CEO calls a governor up, but rather a pre-emptive move to avoid an ugly public relations problem. In other words, corporations changed their behavior before a boycott even appeared on the horizon. That's significant since it saves everyone so much time, energy, and anger. Once again, the Confederate battle flag issue didn't just appear this week -- there are many groups who have been trying to move the flag permanently "to a museum" for a very long time now. When giving credit to good corporate behavior, it's always relevant to ask: "What took you so long to decide this?"

Even so, some credit is deserved. By using the power of reverse-boycotts, American corporations are now doing the same thing consumers have done throughout history. They are threatening the bottom line (tax receipts from employed citizens, plus corporate taxes) of state governments, in order to convince those governments to change their behavior. The corporations are taking on the mantle not just of personhood, but citizenship.

It's pretty easy to bemoan corporate bad behavior (mostly because there is so much of it to choose from), and likewise easy to condemn the oceans of cash flooding the American political system that have been unleashed by Citizens United. Even among all this negativity, though, a positive thing seems to be happening. Boardrooms are realizing that their public statements and positions on political issues actually do matter to their brand. This is happening before anyone even threatens boycotting them -- they're not so much bending to direct public pressure as they are trying to get out in front of the issue, not just to create good feelings for their brand but also to pressure some politicians to change their ways as well. I'm not wearing rosy-colored glasses here -- American corporations have a long way to go on a huge number of other issues. But when they take tentative steps towards responsible corporate citizenship, they do deserve to be applauded.

-- Chris Weigant


Follow Chris on Twitter: @ChrisWeigant


18 Comments on “New Corporate Politics?”

  1. [1] 
    Elizabeth Miller wrote:


    I'm not wearing rosy-colored glasses here -- American corporations have a long way to go on a huge number of other issues. But when they take tentative steps towards responsible corporate citizenship, they do deserve to be applauded.

    Excellent column ... and a pleasure to read! I'm just really, really happy to see some positive developments that are truly worth applauding. Ironic that it's coming from the corporate world but, at this point, I'll take it where I can get it.

    Who knows, rose-coloured glasses and cockeyed optimism notwithstanding, this could be a very significant and historic turning point.

  2. [2] 
    Chris Weigant wrote:

    LizM -

    Yeah, I wrote this because I think something's going on that few are noticing in terms of changing attitudes on corporate boards. Corporations are starting to take the lead in being progressive -- a welcome development indeed. One that should be applauded, even conditionally.


  3. [3] 
    Michale wrote:

    . That's the whole point, after all -- economically punishing a corporation for perceived wrongdoing (moral or political) and getting them to not only see the error of their ways but also to make a conscious business decision to change course.

    Call it what it is.

    Economic terrorism...

    Attacking/punishing innocent people to change the operating ways of an entity that the people hurt have little or no control over...

    I can give you dozens, if not hundreds of examples...

    But when they take tentative steps towards responsible corporate citizenship, they do deserve to be applauded.

    here here...

    Credit where credit is due.... That's what I always say...


  4. [4] 
    TheStig wrote:

    Corporate Citizenship is a well recognized concept in the business world, often under the alternate ID of Corporate Citizenship. In the progressive variant, management recognizes the company is better off when the whole community is better off. Companies like Kodak (Rochester) and NCR (Dayton) were instrumental in providing leadership (and cash flow) that turned small towns into well run small cities. When localized business globalized and decamped starting in the '70s, their host cities took a huge hit.

    Things tend to run in cycles. Maybe Rockefeller Republicanism is about to make a comeback? That would be interesting.

  5. [5] 
    TheStig wrote:


    should have read: "Alternate ID of Corporate responsibility"

    Tiny tablet screen strikes again!

  6. [6] 
    Michale wrote:

    Yea, I had noticed that... :D

    "In the dictionary under 'redundant' it says, 'see redundant'.."



  7. [7] 
    dsws wrote:

    That's not what "redundant" means. "Redundant" means something different.

  8. [8] 
    Michale wrote:

    You'll have to speak to Robin Williams about that..

    I was just quoting him... :D


  9. [9] 
    Elizabeth Miller wrote:


    Robin Williams had it right.

  10. [10] 
    Michale wrote:

    Robin Williams had it right.

    He usually does.. :D


  11. [11] 
    dsws wrote:

    Something is redundant if it's unnecessary because something else fulfills the same function. The correct term for a definition of that form would be "recursion" or "self-reference".

  12. [12] 
    dsws wrote:

    adjective: redundant

    not or no longer needed or useful; superfluous.
    "this redundant brewery has been converted into a library"
    synonyms: unnecessary, not required, inessential, unessential, needless, unneeded, uncalled for; More
    surplus, superfluous
    "the system is hobbled by redundant paperwork"
    antonyms: essential, necessary
    (of words or data) able to be omitted without loss of meaning or function.
    (of a component) not strictly necessary to functioning but included in case of failure in another component.

  13. [13] 
    dsws wrote:

    Stores like Sears and Wal-Mart suddenly announced they would halt selling all merchandise with the Confederate battle flag on it. This trickle soon turned into a flood, as they were joined by Amazon and eBay and Kmart (and, doubtlessly by the time you read this, many others).

    As I draw the line, Sears, Kmart, and Walmart were right, and eBay and Amazon were wrong. No one should buy a Confederate flag; no one should sell a Confederate flag. But no one should make that decision for anyone else.

    Suppose the shoe were on the other foot. Suppose someone with the requisite financial clout had decided to suppress the sale of merchandise bearing the name, image, or words of Malcolm X or MLK. If they decided to stop selling it in their own store, I would disagree with their decision, but acknowledge their right to decide what they wanted to sell. If they decided to take advantage of their control of what amounts to commercial infrastructure, and make it hard for other people to sell MLK merchandise, I would object.

  14. [14] 
    Chris Weigant wrote:

    dsws [13] -

    That's an interesting point. What I wondered about Ebay was what about actual historical antiques? Would an authentic battle flag from the era be allowed?

    Didn't really come up with an answer, just wanted to toss it out there.


  15. [15] 
    Michale wrote:

    Jefferson was a slave owner..

    I guess the Jefferson Memorial must be torn down as it's a "symbol of hate."

    Can't ya'all fathom how ridiculous this all is???


  16. [16] 
    Michale wrote:

    Oh Frak.. Wrong commentary...

    Sorry about that...


  17. [17] 
    akadjian wrote:

    Marc Benioff of Salesforce was key to mobilizing the opposition. He threatened to pull out of Indiana.

    Eli Lilly, Indiana's biggest employer, was also huge.

    Now if we can just get more corporate leadership on the economy. I think many, many corporations are frustrated with the short-term direction and multi-national favoritism of the U.S. Chamber of Commerce.


  18. [18] 
    akadjian wrote:

    Btw, CW, this really was a great column. I had a similar thought after watching what happened with the RFRA in Indiana but hadn't been able to think fully through it like you did here.

    Really nice piece!

Comments for this article are closed.