Is Your Company Woke?
(Preface:?It’s not my intent here to opine on the relative merits of “woke-ism;” I am simply sharing what I believe to be the challenges reputation managers face in the conversation around the topic.)
There’s no denying it.?“Woke-ism” has become a minefield for Corporate America, and “woke” is the newest four-letter word; at least in the minds of one political ideology.?No company can take a step without some level of peril.?
Over the course of the past month or so I have had a series of discussions with clients about whether they were prepared to answer the question, “Is your company woke?”
The general reaction I received was it was best to duck-and-cover.?There was no reputational upside to getting caught in the political vortex of woke. Yet, that is precisely where many companies find themselves.
By now, I imagine most of us have seen the viral video of author Bethany Mandel getting caught up trying to define woke.?
Merriam-Webster defines it as “aware of and actively attentive to important societal facts and issues.”?A USA Today/Ipsos survey found that a majority (56%) of Americans see the term as a positive attribute.?But another 39% see it as meaning to be overly politically correct.
For Corporate America, the term has become a catch-all describing a myriad of social issues which companies are attempting to manage, and in return are being challenged as to why they are trying to manage them at all.?
Climate change… ESG… DEI… BLM… Greenwashing… LGBTQ+… Stakeholder capitalism… racial equity and justice… abortion/right-to-life… ?the list goes on, as does the the pushback on all of the above.
Unfortunately, these terms and topics are now being used as cudgels to attack or defend political ideologies, and in the process drawing companies into this maelstrom.?Most companies are keeping their heads down; though a few, notably Mars and Disney, seem willing to push back.
Why?
A confluence of circumstances is largely responsible for the emergence of this political mine field.
First is the growing strength of the conservative political movement.
Second, many companies have become more visibly involved in social issues as stakeholder expectations have evolved.?At the same time, critics contend that any focus on ESG is a distraction from the bottom line.
As an example, the conservative media website, the Daily Signal, posed the question, “Did Silicon Valley Bank Prioritize Social Justice Over Risk Management?”
The Business Roundtable’s August 2019 “Statement on the Purpose of a Corporation” -- signed by more than 170 CEOs – stands as a watershed moment in the evolution of woke-ism.?
I always warn my clients of the law of unintended consequences.?In this instance, these CEOs created an expectation that the interests of workers, customers and communities are on par with those of investors; in the process pushing companies into the political/social arena more than they had been to date and, in some cases, were prepared for. ?The battle between Stakeholder Capitalism and Shareholder Primacy was on.
Perhaps related to this, the noble corporate response to the murder of George Floyd and the subsequent focus on racial justice in America in the summer of 2020 created an expectation that companies would be equally engaged in other social and political issues going forward.
Which brings us to the emergence of ESG and ESG investing, which over the past year have become the punching bag of the far right.?That current Presidential contenders are using woke-ism and ESG as political rallying cries is testament to this trend.
Just so that I am not viewed as being singularly critical of the right, another political trend that is creating discomfort for corporate America is the weaponization by left-leaning activist groups of PAC contributions.?Companies are coming under increasing criticism for contributions to elected officials who may support controversial views, even if those positions have no relation to rationale for the PAC donation.?For example, a number of companies were criticized last year for their PAC contributions to legislators who voted against an abortion rights bill, even as the companies themselves committed to covering travel expenses related to abortion.
These activists are trying to spin a story of hypocrisy, and have had a fair amount of success in causing companies to duck-and-cover in explaining their PAC giving.?In reality, most companies look simply at a legislator’s positions on tax, trade, regulations and other business-specific policies that directly impact a company or a sector.??For some companies, this discomfort is causing them to re-examine their PAC strategies.
So, What to Do?
How does a company navigate this mine field??Should a company defend itself when accused of being woke, or its ESG and DEI activities are said to be unnecessary responses to woke-ism??How do they respond to all the ancillary questions?
The list of questions is endless.?Each one a trap; but each one also legitimate.
First, companies should not ignore the questions.?They need to be prepared for them.?Particularly in regard to their employee base.
Second, a company must be able and willing to clearly explain the nexus between any such activities and their business (as distinct from Foundation initiatives).
Companies must also double-down in explaining to their workforce their corporate values, and how they directly relate to their business strategy, to their actions and to the workers themselves.?Understanding a company’s values must not be assumed.
Lastly, companies need to be very deliberate in deciding when to raise their heads above the parapet, and must understand the consequences.?Many companies earned the respect of employees, customers, investors and other stakeholders when they made principled statements and commitments to racial equity and justice during the summer of 2020.?But they also created an expectation that they would remain visibly engaged on this topic, and any other social topic that would capture the nation’s attention.?
I don’t see this criticism of ESG and woke-ism as a passing storm from which companies and their reputation managers can simply take cover.?Rather than play defensive whack-a-mole, reputation managers need to be anticipating how these issues can manifest themselves into reputation challenges and communications headaches.
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