Making a Stand on Social Issues: Two CEOs Press Their Case

Howard Schultz and Alan Joyce, the respective heads of Starbucks and Qantas Airways, have both faced criticism in recent weeks over their decision to speak out on social issues. And both men have just voiced strikingly similar remarks explaining why it’s their belief that CEOs, particularly of consumer-facing companies, should mix business with social commentary.

They’re airing their views as a divisive political climate puts the opinions of business leaders under a bright light, challenging them to successfully balance espousing their company’s values while respecting the assorted views of their customers.

Striking that balance can be a bit like walking a tightrope, as Under Armour CEO Kevin Plank discovered. Indeed, research released this week by Harris Poll found that although 75% of Americans wouldn’t talk about politics if they were CEO, 51% expected actual leaders to have a clear position on visible political issues.

Schultz, while addressing his final shareholder meeting before handing the reins at Starbucks to Kevin Johnson, said the coffee chain’s financial success was steeped in its culture of balancing profits with a social impact agenda.

“NONE OF THE THINGS WE HAVE TRIED TO DO AS A COMPANY, WHICH IS BASED ON HUMANITY AND COMPASSION, IS BASED ON POLITICS. IT’S BASED ON PRINCIPLE AND OUR CORE BELIEFS.”

 

“It’s about creating the balance that we’ve always believed in, in creating long-term value for the shareholder, profit in everything we do, but at the same time recognizing the importance of the fragile balance of social impact, conscience, benevolence and serving the communities and serving their people,” he said.

Schultz long has been one of the country’s more outspoken CEOs on social issues such as gun control, race relations, LGBT rights and, most recently, immigration. On Wednesday, he reiterated the company’s intent to hire 10,000 refugees in the wake of Donald Trump’s attempted travel bans, despite claims the move could damage the company’s brand, at least with some Republican supporters.

One shareholder at the meeting, Justin Danhof, from the conservative think tank National Center for Public Policy Research, asked Schultz why he was willing to let the company’s reputation “take a beating”. Schultz replied by saying its decision was not so much based on politics, but on corporate values.

“None of the things we have tried to do as a company, which is based on humanity and compassion, is based on politics. It’s based on principle and our core beliefs,” he said. “I can unequivocally tell you—and we all know this from the research we’ve done—is there is zero, absolutely no evidence whatsoever that there is any dilution in the integrity of the Starbucks brand, reputation, or our core business as a result of being compassionate.” The full exchange can be viewed here.

Captain of the”Flying Kangaroo” hits back
Down in the southern hemisphere, Qantas CEO Alan Joyce is taking grief from the Australian government over his decision to join dozens of other CEOs calling for the legalization of same-sex marriage. Joyce, according to Immigration Minister Peter Dutton, should “stick to his knitting” and only talk about hard business matters like profits and taxes.

“There’s been a lot of discussion in Australia over the past few days about whether companies (and CEOs, in particular) should express a view on social issues,” Joyce wrote in a piece posted on LinkedIn. “My view is that they absolutely should.”

Joyce said a CEO’s first responsibility is to shareholders and delivering sustainable returns on investment. But to do that, he argued that leaders are automatically part of the community in which they operate.

“Society is your customer base,” Joyce said. “And just because there is money changing hands doesn’t mean it is only ever an economic transaction. There’s an implicit social contract between companies and communities—just ask any brand that has ever been on the receiving end of a boycott.”

Boycotts, of course, can cut both ways, though Joyce and other CEOs supporting same-sex marriage appear to be on the right side of public opinion, with polls suggesting a clear majority of Australians are in favor of legalization. The fine line CEOs are continuing to walk, however, was personified in one comment on Joyce’s LinkedIn feed.

“But what about the minority of your shareholders who support traditional marriage—are their views to be disregarded?,” the man said in a comments section that was otherwise largely supportive of Joyce’s stance.

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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