When taking a stand on social issues, companies risk losing it all

When a company takes a public stance on a social issue, it can enjoy positive publicity, promote its corporate values, and even see a growth in profits. But when it goes the other way, the result can be irreparable damage. Tony Jaques explores how companies can choose whether championing a cause will help or hinder both its brand image and bottom line.

The question of whether corporations and CEOs should get involved in high-profile public issues is hardly new. But it vaulted into prominence last month when Brunei introduced new laws which would allow gay men and adulterers to be stoned to death.

There was a predictable global outcry, led by human rights groups and celebrities such as Elton John, George Clooney and Ellen DeGeneres.

Nike sparked controversy with this campaign featuring American footballer Colin Kaepernik, famous for kneeling during the national anthem.

And while the celebrities called for a boycott on the nine hotels around the world owned by the mega-rich Sultan, it also posed an important challenge for governments and companies with links to the tiny Asian Sultanate.

One company out in front was global travel agency STA Travel, which stopped selling flights on Royal Brunei Airlines, and not only refunded tickets but also decided to absorb cancellation fees imposed by the airline. STA told me they believed Brunei’s actions were in contravention of human rights, and that the new laws pose a direct safety risk to their customers, as they also apply to passengers on Brunei-registered ships and aircraft.

Meanwhile, the Queensland government axed plans for a partnership with Royal Brunei Airlines, major companies such as Deutsche Bank banned their staff from staying in Brunei-owned properties, and a string of British organisations confirmed they will not be holding events at the Sultan’s Dorchester Hotel, including the TV Choice Awards.

In the face of international criticism, Sultan Bolkiah announced last week he will not enforce the death penalty for homosexual sex (though of course it remains punishable by imprisonment).

However, the case highlights once again whether companies and brands should take a stand on political and social issues. As British brand consultant Steven Strickland told PR News: “It shouldn’t take George Clooney to prompt people into action.”

There is a large and growing body of research which says the public want companies and brands to speak up about social issues. For instance, the Edelman Earned Brand Report for 2018 shows that 64% of consumers worldwide are “belief driven buyers”, up from 51% the previous year.

As a result, big brands are increasingly taking notice. Just in the last month we’ve seen Cadbury Australia launch it’s “Symbol for All” campaign against racism and intolerance, and Converse reap praise for its new transgender-themed sneakers as part of its Pride Collection.

Yet brands still seemingly don’t understand that corporate activism comes with risk.

A recent YouGov study in the United States showed that while more than half of millennials supported brands taking a stance on social issues, 59% of adults would boycott a brand if they disagreed with its public position on a particular issue.

Look no further than Australian brewer Coopers, whose CEO was forced to apologise in 2017 for a “light-hearted” YouTube video debate on same-sex marriage linking his beer to a religious group known for its opposition. Facing a threatened boycott, MD Tim Cooper asked for the video to be withdrawn and publicly stated his company’s support for marriage equality.

So, before a company decides to take a public stand on a high-profile controversy, your motivation needs to be very clear. Asking yourself these questions may help.

  1. Is this issue aligned with our corporate values and business operation?The STA decision was motivated by outrage and genuine safety fears expressed by travellers. Similarly, some major American stores like Target, Starbucks and Chipotle have banned guns to support the gun control issue and protect customer safety. Though it has to be said that some restaurant chains advertise “guns welcome,” presumably for the same reasons.
  2. Are we taking this stand because controversy helps drive sales and profits?Nike courted outrage when their advertising featured controversial American footballer Colin Kaepernik, famous for kneeling during the national anthem. Plenty of people were upset and shares initially fell sharply. However, the company enjoyed an upward spike in sales, not to mention a reported $43m worth of media exposure, and year on year share value rose by $6bn.
  3. Are we taking this stand because it reflects the personal views of senior management but has no direct link to our business?Perhaps that was the challenge for Coopers Brewery.
  4. Are we taking a stand because many of our stakeholders think it’s important even though we don’t have a strong opinion either way?
  5. Are we simply jumping on the band wagon because it seems like a popular issue and we might stand out if we don’t support it?

There are no right answers, and the motivation may be different in every case. Indeed, there’s a good chance that what will please some stakeholders will surely displease others.

But whatever the reason for taking a public stand on an issue, your executive needs to understand what you are doing and their role in supporting it. And you need a well-prepared communications plan to respond to feedback.

In the end, the fundamental consideration remains the same: You need to do it for the right reasons, and you need to understand that championing a social issue can pose a risk for your organisation as a whole.

Tony Jaques is the managing director of Issue Outcomes


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