The Real Co$t of Free Speech

We live in a society where we apply today’s media-generated standards retroactively to past actions. In an age where almost everything is public and able to be traced on the Internet, that’s bad news for CEOs. Just look at what happened recently to Mozilla CEO Brendan Eich. Eich, a founder of JavaScipt and co-founder of Mozilla, was forced to resign from the popular web-browsing creator Firefox just 10 days into his tenure after the fact that, seven years earlier, Eich had made a small donation of $1,000—in support of a California ballot initiative against gay marriage—went viral. The fallout was dire even though the initiative in question handily passed, affirming the views at the time of a majority of California voters.

Despite holding interviews and releasing statements asserting that he was committed to making the not-forprofit Mozilla welcoming to the gay community and that his personal beliefs were divorced from his professional duties, Eich was unable to allay concerns.

In an interview with CNET, Eich said, “If Mozilla cannot continue to operate according to its principles of inclusiveness, where you can work on the mission—no matter what your background or other beliefs, I think we’ll probably fail.” He also asserted: “Beliefs that are protected, that include political and religious speech, are generally not something that can be held against even a CEO.”

Eich was wrong. He was unable to stem employee and customer anger and outrage. When he stepped down, Mozilla’s board of directors apologized to employees in a company blog post for “not acting like you’d expect Mozilla to act” while reaffirming that the company believes in “free speech and equality”—that apparently did not extend to Eich.

Changing Rules
The story is a cautionary tale to any CEO. “Ten years ago, no one would have known that he’d made the donation,” says Professor Chris Collins, of Cornell University’s School of Industrial and Labor Relations. “Now, these jobs are more challenging.”

Peter Gleason, managing director of the National Association of Corporate Directors, says that this is a dangerous trend. “At Mozilla, it’s a social issue impacting a business issue. Do you now question whether ardent Catholics, who may not believe in gay marriage, are fit to be CEOs? Is that discrimination in itself? There are no clear rules.”

But “it is an unfortunate reality of the world,” says Jim Copland, director of the Manhattan Institute’s Center for Legal Policy. “The CEO’s viewpoints are held out as the company’s viewpoints.”

And the opposite is true, too. For example, while billionaire Tom Steyer, founder of hedge fund Farallon Capital Management, made his fortune in part by investing in energy and mining companies, he has since become a staunch environmentalist. Despite announcing that he plans to spend $100 million to support political candidates committed to stopping climate change, his conversion is questioned by the media and opponents.

Indeed “this is a generation of permanent record,” says Dan Benton, CEO of investment management firm Andor Capital. Benton, who also sits on five not-for-profit boards, including the Hospital for Special Surgery and Colgate University. He asserts that “all is archived and findable.” In the case of Mozilla, he adds, “the backward-facing analysis is what is disturbing. Peoples’ beliefs may change over time. I know mine have. It is not terribly fair.”

Yet Benton says that not-for-profits face different and potentially greater scrutiny than publicly traded or for-profit companies. “The standard of behavior or decorum may be greater because the organization is standing for something; it has an intangible social good and so the reputational vulnerability is greater. Success is not measured on a profit or loss sheet or by shareholder value.”

Zack Rosenburg, CEO of the St. Bernard Project, a not-for-profit disasterrelief program, says that running any organization is a special responsibility. “It must trump my desires and personal beliefs. We can’t prioritize our comfort over our clients.” That being said, he does not think CEOs should be cowed into silence. “It is important for CEOs to be leaders and not shy away from what they think is forward thinking.”