Social and cultural and political (issues), oh my!

October 25, 2022
By Liz Sidoti and Kendell Fitter

Politicians are drawn to corporate crises like sharks to blood – especially during election season. This year, with candidates likely to seize on anything that could give them an edge in what’s become a tighter-than-expected fight for control of Congress, the risk that companies could unwittingly find themselves attached to an issue and, therefore, in reputation-threatening turmoil is even greater than usual.

Today, stakeholders are increasingly pressuring C-suites and Boards of Directors to speak out on social, cultural and political issues, many of which are difficult to navigate in “normal” times and take on outsized importance in campaign years. Especially in the 11th hour of close political races, candidates look to capitalize on whatever they can to curry favor and gain an advantage with voters – including politicizing corporate crises, even those not yet headlining the news.

While our firm has written on this issue before, we have found ourselves increasingly counseling clients on such matters and believe our approach is especially valid in such a politically charged environment, and, therefore, bears more discussion.

To wit, it behooves companies to try to avoid letting themselves be branded with a controversial incident or issue, more specifically, a negative event that threatens their reputations, especially on matters that can spiral quickly. These days stakeholders generally expect companies to weigh in on social, cultural and political matters to some degree, including on the most hot-button topics in those buckets. As long as speaking out is consistent with their culture, companies must determine what issues and when – and how best to communicate those views and/or positions.

Here’s how to minimize the risk of creating a crisis on such matters – and avoid poking the political bears in the process:

DEVELOP A PHILOSOPHY:

No “one-size-fits-all” communications approach exists for companies on such complex issues. The context will be different, the situation will be fluid and the environment will be constantly changing. But a company should, during “peacetime,” develop a viewpoint on how and through what channels it will communicate – or not – on policy issues, if not on politics generally. The company should then publish that general philosophy in the annual report or on the external website. This will allow leaders to set expectations while giving all stakeholders a way to hold them accountable, and, in doing so, limit chatter among key stakeholders and lower the pressure to engage on every issue. Avoid actually naming each precise issue on which the company will engage, as that would generate – rather than limit – noise.

LET THE BUSINESS AND CULTURE DRIVE:

Next, companies that decide that they will engage in some way on policy issues and/or politics should create a framework or matrix for determining when and on what topics to actually engage. The answers to two questions should provide a foundation: 1) Does the issue in question impact the business directly? This includes considering whether it affects issues like supply chain and physical assets or stakeholders like employees, suppliers, customers, partners, etc. If so, to what degree, and are they affected differently? 2) Would weighing in be consistent with company culture and leadership ethos? If “No” is the answer to both questions, the next becomes: “Do we really belong in the conversation?”

PLAN FOR ALL SCENARIOS:

It’s also essential to understand as much as possible what might be the thorniest issues and game out how they might surface and how stakeholders might react. But don’t just plan in a silo; seek input from stakeholders, like employees and customers, to both understand perspectives on possible reactions to a company’s engagement, or lack thereof, as well as generate buy in for the approach the company ultimately will adopt. Such conversations will help companies understand what communicating on an issue now will mean down the road.

With activism undeniably on the rise across all stakeholder groups, contentious social, cultural and political issues are poised to continue moving even more quickly into C-suites and boardrooms. Therefore, developing an approach – and communicating about it – is becoming even more important. Indeed, failing to think about and plan for engagement in policy debates and politics could tempt fate – and thrust the company into a full-blown reputational crisis that could threaten the bottom line and have far-reaching consequences during election season and beyond.