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 our bifurcated society, your perspective on one issue may tick off half the population—liberal or conservative.”

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.”


Speaking Out
However, that thinking must be inclusive, says Daniel Riordan, CEO of Zurich Global Corporate in North America, a multi-line insurer. “I am a firm believer in First Amendment rights; and at the same time, I’m responsible for cultivating a diverse and inclusive work environment where no one feels alienated and differences are celebrated,” he says. “This means not only race, gender, religion and ethnicity but also diversity of thought, experience and culture.”

Riordan reports that during town hall meetings with employees, he makes sure he is clear about his strategy for openness and “then, I stay and answer all of their questions because their opinions are reflective of our community and our customers. We have a right to our opinions, but we need to think about how we act on them and what we are trying to accomplish together as a company.”

Riordan sees this age of permanent record as an opportunity for CEOs to have a chance to model “doing the right thing.” For example, after Hurricane Sandy, he and his family worked with Zurich’s employees to help rebuild homes. He posted pictures of his family’s efforts on the company website. “It’s a real positive for well-grounded individuals.”

Allen Perk, president of XLN Systems, a network-security company, agrees. He says when people know something about him, “they know things about my character and—as such—[they] can determine things about my belief and values and whether they want to do business with me.”

Still, Tom Saporito, CEO of consulting firm RHR International, says he is very careful about what he says, aware “that it could be taken out of context,” a tricky balance since “in our bifurcated society your perspective on one issue may tick off half the population—liberal or conservative.” Even when related to the company’s performance, say taxes or regulation, “a public stance affects the way the issue is viewed in relation to the company.”

Sometimes, context also plays a part in how a personal opinion translates publicly. Chick-fil-A CEO Dan Cathy made headlines in 2012 by taking a public stance on the radio in favor of traditional marriage. The interview was perceived as Cathy’s coming out against gay marriage, which led to LGBT kiss-ins at the company’s chain of restaurants. Yet, in 2007, when the company detailed its Christian values to Forbes, noting that it closes stores on Sundays so employees can attend church, there was no such outcry. While Cathy has not changed his personal views, he gave an interview with The Atlanta Journal-Constitution earlier this year saying he’d made a mistake and that he regretted “making the company a symbol of the marriage debate.”

Engage Without Alienating
Tim Tragesser, president of technology provider Polar Systems, says CEO free speech requires a fine balance. “It is a challenge,” he says. “You don’t want to be seen as pushing beliefs onto employees. Our words can get interpreted a lot of different ways. I am cautious about supporting sides of controversial issues from a corporate perspective.”

However, “the message is not to disengage from politics,” says Copland, who notes that companies and shareholders benefit from companies engaging in issues affecting communities. Riordan’s advice: “We all come from different environments and faiths and we don’t need to put that in a drawer, but we need to think about promoting inclusive workplaces that reflect the marketplace.”

The bottom line: There is only limited free speech for CEOs—because while everyone has a right to free speech, not everyone has the right to be CEO.

Sidebar: In the Boardroom: Vetting CEOs

 

" Cheryl Strauss Einhorn : Cheryl Strauss Einhorn is a freelance journalist covering international business, economic, financial and political news and is an adjunct professor at both the Columbia Business School and the Columbia University Graduate School of Journalism. For more information visit www.cheryleinhorn.com.."