The article in the url below presents a different take on the debate around the extent to which companies should engage in discussions around social issues:
"Companies ranging from Anheuser-Busch to Disney and BlackRock have recently lost loyal customers and billions of dollars in market capitalization and assets after wading into controversial political issues. The reason customers left and investors bailed is simple: These companies failed to carry out what they had promised in their mission statements."
In essence, the argument is that companies should, first and foremost, stay true to their founding mission, and that it is when they diverge that confusion is caused. Anheuser Busch's mission, for example, is to "Dream Big to Create a Future With More Cheers," while BlackRock promises to "to help more and more people experience financial well-being," both of which suggest a more neutral foundation:
"Clear mission statements are critical for company success. A 2016 Harvard Business Review study found that companies that clearly establish their purpose innovate more successfully and increase revenue faster than companies that don't. That's because clear mission statements explain why a company exists and what it hopes to achieve. They also identify its present—and, ideally, future—customers. This aligns internal employees and external investors in pursuit of a common goal: delivering great products and services to increase shareholder value."
Disney is another example of a company that has gotten itself into trouble, of late, with what some see as a confounding of its guiding purpose:
"[Disney's] stated mission is 'to entertain, inform and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands, creative minds and innovative technologies that make ours the world's premier entertainment company.' Creating movies like 'The Lion King' and 'Star Wars' is on mission. Less so is public criticism of such legislation as Florida's Parental Rights in Education Act, which prohibits the state's educators from teaching about sexual orientation and gender identity in classes from kindergarten through third grade. When Disney announced its opposition to the bill in 2022, the majority of its customers disagreed. Disney's public approval rating cratered to 33% in 2022 from 77% in 2021. Customers spoke with their wallets. The company's streaming service, Disney+, saw canceled memberships, and attendance at Disney theme parks suffered. The company's stock remains depressed even after it swapped in new leadership."
Ultimately, the author is arguing that there should be alignment between mission and behavior. Stakeholders engage with a company based on an understanding of what it is that the company does. If the company suddenly diverges from that, however well-intentioned, then it will confuse stakeholders who had been engaging based on alternative assumptions:
"Anheuser-Busch, Disney and BlackRock could learn about proper mission control from Ben & Jerry's. The ice-cream company has been aligning customers and shareholders behind a progressive and social mission for decades. Its mission states: 'We believe that ice cream can change the world. We have a progressive, nonpartisan social mission that seeks to meet human needs and eliminate injustices in our local, national, and international communities by integrating these concerns in our day-to-day business activities.' When Ben & Jerry's supports returning to Native Americans what it claims is stolen land, when it advocates overturning voter-integrity laws, or when it favors defunding the police, its customers aren't surprised. This is because Ben & Jerry's has been advocating such change since two Vermont hippies founded the company in 1972. When they sold the business to multinational conglomerate Unilever in 2000, they maintained an independent board to make decisions on the company's social mission. Their customers expect this activism and buy such ice-cream flavors as 'Save our Swirled' and 'Empower Mint' to support social causes."
For me, the takeaway is that companies need to be founded based on a strong set of values, and those values should be conveyed to stakeholders clearly, from day 1. That authenticity is what binds stakeholders to companies, because the relationship is based on transparency and trust. It is when companies diverge, often for superficial reasons because they feel pressured to comment/act on the topical issue of the day, that problems arise. A company staying true to its values means refusing to engage in certain issues unless they are consistent with what the firm has believed and how it has acted, all along.
Take care
David
David Chandler
© Sage Publications, 2023
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Why Woke Works for Ben & Jerry's
By Anson Frericks
August 9, 2023
The Wall Street Journal
Late Edition – Final
A17
