This week, corporate America faced a test of nerve. Other giants watched as Starbucks implemented company-wide anti-bias training in an attempt to repair brand damage after the arrest of two black customers in a Philadelphia store. There was also the start of a US-European trade war.
Then came Roseanne Barr’s racist tweets about the former Obama adviser Valerie Jarrett. ABC-Disney canceled her show but after Barr blamed her comments on her use of Ambien sleeping pills, drug giant Sanofi was forced to tweet that “racism is not a known side effect” of any its medication.
Finally, the comedian Samantha Bee called first daughter Ivanka Trump a “feckless cunt” on her late night TV show. The White House called Bee “vile and vicious” and leaned on Time Warner to repudiate her. Two advertisers, Autotrader and State Farm insurance, walked away. Bee apologized, saying she “crossed a line”.
For big business in America, there is no safe political ground. Its willingness to support Trump cooled dramatically after the president equivocated over racist protests in Charlottesville, Virginia, last August. Soon after, corporate America was identified collectively by conservative media as “part of the opposition”.
“It’s very difficult to stay out of the fray,” said Nancy Koehn, a historian at Harvard Business School and author of Forged in Crisis, who said that from her 30 years as a business historian, she could not think of a comparably unsettled period. “The stakes are very high and the turbulence is intensifying.”
Koehn said that in a striking reversal from a time when corporate America frequently ducked responsibility for fear of alienating consumer groups, corporate leaders now cannot afford to be silent on political issues, lest they risk the reputation of their companies.
That new willingness to take a stand could be seen after Charlottesville, when corporate leaders abandoned Trump’s business councils.
“I feel a responsibility to take a stand against intolerance and extremism,” wrote Kenneth Frazier, boss of Merck, a pharma giant.
It happened again after the Parkland school shootings, when Walmart and Dick’s Sporting Goods took assault rifles off their shelves.
“We’re seeing more CEOs putting their stake in the ground in relation to their companies around political issues,” said Koehn, who added that corporate leaders recognize “a real danger that in discourse and policy what counts as the fundamental values of a democratic society are now vulnerable. There’s isn’t a leader I’ve spoken to who isn’t aware of that.”
The larger question of what this might mean for the future of corporate America is harder to answer.
“The simple answer is that it means nothing good,” said Koehn. “There is nothing good for business leaders in the turbulence that is being fomented by the president and his administration without rhyme and reason or any attention on the long-term stability of the US economy.”
What, for instance, should a manager at Anheuser-Busch do or say about buying aluminium for beer cans when a metals trade war has been threatened for the past four months? There may be 50 such examples like that, Koehn said, that “the purposeful turbulence is making it very difficult for business leaders of any stripe to make smart bets in this environment”.
One answer to more sociological concerns, said Jenny Abramson of the diversity-conscious venture capital fund Rethink Impact, is to stress gender and racial diversity. An area once largely avoided is now considered a bulwark against chaos, she said. Simply put, it is bad business to risk being identified as racist, sexist or intolerant.
“When you put the cultural awareness of #MeToo and Time’s Up with business data on gender and racial diversity,” Abramson said, “you can see it’s good for the world and good for business. It may have taken going to another extreme to get people here, but its affecting a real change in US business.”
Trump may be only reinforcing a longer-term trend for business to become more outspoken, said Koehn, but his administration has effectively forced companies to expand their view of social responsibility.
“The job of government is not being done,” she said. “So business leaders are trying to step in. Are they doing it perfectly? No. But this is an unprecedented situation. They’re trying to learn to do it, in their own ways, and with respect to their stakeholders.”
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