Why It’s Time for Corporate America to Truly Take a Stand
Not long after Vladimir Putin dispatched troops to Ukraine, American companies were among the more than 450 firms worldwide that withdrew, suspended, or scaled back operations in Russia. Coupled with various government sanctions, their response to the invasion is expected to shrink Russia’s economy by as much as 10 percent this year, prompting Putin to liken it to “an act of war.” As the Wall Street Journal observed, CEOs moved with unusual speed and collective action to counter tyranny. The question now is: will they do the same at home?
Autocrats come in all shapes and sizes, and no country is exempt. In the United States, the Republican party has become a hothouse of authoritarian dogma. Not just among those from what conservative stalwart Liz Cheney has dubbed the “Putin wing of the GOP,” but scores of party members who are still fans of an ex-president who sought to overturn a democratic election. By and large, they are folks who resist change and fear outsiders, and who seek strongmen or women to shield them from both. These days there is no shortage of opportunists who are glad to oblige, at times using the same kinds of repressive techniques as the despot Corporate America opposes abroad.
Menacing Bedfellows
A favored ploy of oppressors is to target marginalized members of society for political gain. Current prey includes transgender children and teens. Recently, Putin argued that teaching gender fluidity to children is a “crime against humanity,” and had previously signed an anti-gay propaganda law that made it formidable for parents and kids to access information about nontraditional relations. Across the ocean, several American states have introduced or passed legislation forbidding schools from discussing sexual orientation or gender identity. Worse, a Texas directive has classified medical treatment for transgender adolescents as child abuse, while Idaho’s house of representatives passed a bill that would make such procedures a felony punishable by life imprisonment. It would also block families from getting care outside the state.
These tactics are part of a larger strategy to exploit distorted traditional values. When Putin clamors for “natural and necessary self-purification of society” to strengthen his country, he doesn’t sound all that different than Georgia congresswoman Marjorie Taylor Greene, whose short-lived America First Caucus pushed for “common respect for uniquely Anglo-Saxon political traditions,” and worried that the “long-term existential future of the nation as a unique country with a unique culture and a unique identity is being put at unnecessary risk.” Their common goal here is to appeal to an intolerant and extremely motivated minority on which they rely to stay in power.
One way to do so, explains media critic Eric Boehlert, is to create confusion and raise doubts through a stream of contradictions and misinformation. It is a crucial part of Putin’s lying game and what former Trump campaign strategist Steve Bannon proudly calls “flooding the zone with shit.” Accordingly, it has persuaded many Russians that the war in Ukraine is just, and convinced 40% of Americans that Donald Trump won the 2020 election.
The Right Is Wrong
Nonetheless, the right-wing has yet to win over most of the nation. According to an ABC News/Ipsos poll, better than six in ten people object to banning elementary school lessons on sexual orientation and gender identity. Even in Florida, where Governor Ron DeSantis signed the “Don’t Say Gay” (née Parental Rights in Education) bill, 49% of residents disapprove of the law, whereas only 40% approve. Moreover, research conducted by progressive think tank Data for Progress found that 63% of those queried — including 46% of Republicans — believe parents and doctors should decide how best to care for transgender children, not politicians.
These aren’t the only red state concerns that have failed to garner widespread support. Nearly two-thirds of responders to a Monmouth University poll favor establishing national guidelines to allow mail and in-person early voting in federal elections in every state. What is more, 69% of participants in a CNN/SSRS poll oppose overturning Roe vs. Wade. All of which begs the question why companies that stepped up to confront oppression in Ukraine are falling short of protecting the rights of Americans.
Do As We Say, Not As We Do
It is not that they don’t recognize the problem. A poll of 400 executives and decision makers conducted by Morning Consult for Public Private Strategies, a year after the Capitol insurrection, found that 85% believe capitalism depends on a well-functioning democracy; though 72% think democracy is currently being threatened, including 42% who say it’s definitely being threatened. More than half also endorse engaging in efforts to stabilize democracy.
To date, some 1500 companies have signed a pledge under the banner Texas Competes urging Governor Greg Abbott to abandon his anti-trans decree. Another group of businesses discreetly signed a two-year old petition condemning all anti-LGBTQ legislation after DeSantis put his name to the Florida bill. But imagine if firms had merely appealed to Putin to end his unlawful invasion. The fact is, solicitations like these rarely work, particularly with Republicans who are contemptuous of so-called “woke” corporations.
Such entreaties can also be deceptive. According to a survey by the Harris Poll and SSRS, 84% of respondents believe businesses “often hide behind public support for stakeholders but don’t walk the walk.” To be sure, a 2020 report by the Center for Political Accountability determined that multiple companies which have spoken out on behalf of voter rights, LGBTQ rights, women’s reproductive rights, and efforts to mitigate climate change have, at the same time, contributed to candidates and groups on the other side of the issues.
Double-dealing like this may make sense in the short term. After all, even when the C-suite genuinely dislikes suppressive policies, why further antagonize the people who control the majority of state houses and may take back Congress later this year? Conflict with DeSantis, for example, who aspires to the White House, has emboldened him to be even more reactionary, much to the delight of his base.
Do The Right Thing
But there can be prices to pay longer-term. American consumers are becoming more diverse, and those presently on the receiving end of persecution will increasingly populate the marketplace. During the decade since Gallup first measured LGBT identification, the percentage of adults who self-identify as such has doubled to 7.1%, including one-in-five members of Generation Z. Along with many of their peers, they want brands to take up the cause of LGBTQ+ discrimination.
And it is not just consumers. Employees too, want their leaders to openly address controversial matters. Nobody knows this better than Disney CEO Bob Chapek, whose initial inaction regarding the Florida legislation — and the fact that the company had previously contributed to two of its sponsors — angered workers and creative partners, resulting in a much-publicized walkout. Chapek has subsequently promised to be more aggressive, not only in Florida, but Texas as well. Yet it may not be enough to restore faith in his leadership.
Then there are investors. At AT&T, which has been accused of duplicity with respect to its publicly stated values and political contributions, a group of shareholders have introduced a resolution calling on the firm to create a report analyzing its political and electioneering spending against its principles and policies.
Trouble Ahead
Deceit breeds distrust, already heightened by an onslaught of misinformation. Indeed, the latest Edelman Trust Barometer — the bible of business reputation — has designated distrust as society’s default emotion. This portends trouble ahead. Social scientists Francis Fukuyama and Mark Granovetter contend that high-trust societies have enormous competitive advantage because credibility lowers transaction costs. On the other hand, research by Luigi Zingales, one of the foremost experts on corporate governance, has shown that economies bereft of trust under-perform rivals.
Just as unsettling is the possibility that those who admonish Americans to “love it or leave it” may someday get their way. Historically, among the first to voluntarily abandon authoritarian regimes are the ones businesses can least afford to lose. Witness places like Russia and Hong Kong, which are being drained of tens of thousands of brains across fields like engineering, information technology, finance, law, education, and the arts. Studies in the U.S. have shown that enterprising and accomplished professionals want to raise families where they can develop critical thinking skills and are free to express themselves.
If all this still isn’t enough to convince companies to stand up to mounting autocracy, here is one more reason: common decency. Are they willing to stand by instead as citizens are denied the right to vote, to control their own bodies, or to live how they choose with the care that medical professionals agree is vital to their well-being? CEOs and their minions must make difficult decisions every day. This shouldn’t be one of them.
