Should Companies Take Stances on Social Issues?

Key Findings:

• 75% of workers say it’s important for their employers to take clear positions on social issues. 25% have become more loyal to their companies due to their positions on social issues.
• About 1 in 10 workers have quit jobs or declined job offers because they disagreed with a company’s statements on social issues.
• Two-thirds of workers say their employers have made internal or public statements on social issues in the last three years. Most often, these statements addressed LGBTQ+ issues, racism, and the environment.
• 44% of employees would like their companies to back up statements on social causes with financial commitments, and more than half would contribute their own time or money if their employers created opportunities for them to do so.
• 11% of workers said their companies recently made a statement on the Israel-Hamas war. Only half of these workers agreed with their employer’s stance on the topic.

The Current State of Corporate Commentary

When the Supreme Court granted corporations expanded political speech rights, it gave American businesses greater power while burdening them with more responsibility. Once companies were free to influence elections, customers and workers wanted to know where they stood on mainstream issues.

Taking clear stances on controversial issues can be difficult for image-conscious companies. Still, many have been up to the challenge. Two-thirds of Americans report that their employers have staked out a position on major social issues over the past three years.

Some prominent social issues allow relatively uncomplicated corporate responses. When George Floyd’s death inspired a widespread social justice movement, American businesses invested more than $340 billion in racial equity commitments.

More complex decisions arise when divisive issues can compel corporate support on opposite sides. With reproductive rights under review, some companies have restricted employees’ health plan choices while others pledge to help workers access healthcare. Similarly, many companies have issued public statements regarding the Israel-Hamas war, and many have been cataloged by researchers from Yale.

According to workers, these are the social issues their employers have most frequently  addressed over the past three years:

Have the companies you’ve worked for in the last three years taken a stance or made a statement on these specific social issues?

Less controversial issues receive more robust corporate attention. As LGBTQ+ rights have gained wider public acceptance, corporations have been more willing to support them.

Environmental issues have compelled the most public statements and financial contributions over the past three years. This development is likely attributable to several factors. Promoting a cleaner planet is a message with broad support. Additionally, green initiatives align with many companies’ business models. These policies can also boost marketing appeal as well as stock performance.

While many companies have addressed pressing social issues internally, less than half have made public statements. How does this level of activism sit with employees?

Employee Expectations: Workers Desire Meaningful Corporate Social Action

Businesses may prefer conservative paths that avoid controversial positions, yet most Americans want commitments from their employers on critical issues. Nearly three-quarters of workers feel their companies must take precise positions on social issues.

Women are particularly passionate: Eighty percent of female employees feel clear corporate stances are important, compared to 66 percent of men. Persons of color, most often affected by social injustice and economic disparities, also feel more strongly about activism than their white coworkers.

Significantly, we found that most workers desire more than platitudes and statements from their employers. Three-quarters of workers expressed the cynical opinion that companies often engage in social issues for appearances rather than to effect social change.

To demonstrate an authentic commitment to action, employees want their companies to support social issues via financial donations and community service opportunities, in addition to issuing statements.

Amongst possible avenues of corporate activism, workers expressed the strongest support for corporate financial donations. Committing business funds to social advocacy lets companies “put their money where their mouth is” and prove that corporate stances are more than profit-driven virtue signaling. This approach was particularly popular among women, members of Generation Z, and workers of color.

Most employees were willing to devote their time and money to support corporate social initiatives in a show of solidarity and personal commitment.

Collectively, these responses demonstrate that most employees view corporate activism as important. Next, we sought to discover how an employer’s social stances affected professional morale.

How Corporate Social Stances Affect Workers’ Attitudes

Deployed correctly, corporate activism can provide a notable human resources edge. Nearly half of employees (44 percent) said their company’s activism affects their workplace morale. Additionally, six in ten workers stated that their employer’s social stances impact their trust in company leadership.

To positively influence employee morale and trust, companies must do more than merely take stances on social issues; they need to back positions that workers support. This caveat can present a dilemma with controversial issues that divide workforce sentiments.

In most cases, corporations have apparently made the right decisions.

As discussed above, companies’ anti-racism policies and pro-environment stances won overwhelming support from workers. Companies that staked out positions on these issues found approval from more than 80 percent of their employees.

Public opinion on firearm regulation, immigration policies, and the Russian-Ukraine war tended to split along party lines. Such schisms make it challenging to build a workforce consensus. Still, around 70 percent of employees agreed with their company’s position on these issues.

Corporations issuing public statements regarding the Israel-Hamas war have received less support than other issues, with roughly one-half of employees agreeing with their company’s position.

Companies that successfully align corporate views to worker sentiments can reap rich workforce rewards. Over one-third of American workers have joined a company due to its political positions or grown more loyal to an employer due to its social stances.

Conversely, companies that make the wrong decisions or shy from key battles can struggle to attract or keep talent. Nearly one in ten adult workers have rejected or quit a position due to a company’s stance or silence on social issues.

For example, translator Catherine Diallo left a job at a private college because they didn’t speak up during the Black Lives Matter movement. “Whenever I suggested that the school make a statement against discrimination, I was looked at with wide eyes…The school wanted to stay out of politics altogether.” Diallo explained. “Their radio silence ultimately made me quit and never return to any physical office.”

Pro Tips: How Businesses Can Effectively Engage with Social Issues While Keeping Employees Happy

Throughout our study, American workers expressed the importance of employers taking clear social stances backed by meaningful action. They further emphasized how workplace morale and employment decisions can hinge on companies’ political positions.

Given this topic’s gravity, we sought insights from more than 65 business leaders and asked them to share their best advice about handling corporate social activism. Here are the most common questions business leaders consider when responding to various social issues:

1. Does this issue align with our core values and mission? Many leaders emphasized aligning their companies’ statements on social issues with their core values and missions. This ensures their positioning is authentic and resonates with both employees and customers.“We evaluate social issues to see if they align with our core values and resonate with our diverse employees,” explained Priyanka Swamy, founder of Perfect Locks. “We target issues directly relevant to our sector and social mission. We don’t get involved just for the sake of it and make sure our actions are genuine, positively impacting the causes we care about.”
2. Is this issue relevant to our business and stakeholders? Executives we spoke with tended to engage primarily with social issues pertinent to their industries and directly impacted their employees, customers, or communities. They also focused on engaging in social issues where they could meaningfully contribute to solutions.Wendy Wang, the founder of F&J Outdoor, takes this kind of focused approach to navigating social issues. “We primarily focus on environmental issues due to the nature of our work. We deal with outdoor products, and the preservation of our environment is crucial for the sustainability of our business,” Wang said.
3. Are we genuinely making a difference or merely virtue signaling? There’s a clear distinction between making statements for the sake of appearance and taking concrete actions to support a cause. Many business leaders noted that their statements on social issues are often paired with tangible actions that reflect their commitment. They noted that Gen Z and Millennial workers, in particular, demand authenticity and consistent action from businesses concerning social issues.“When determining whether or not to make a statement – internally or publically – I like to ask two questions, “ said MaryKatherine Lim, founder of MK Communications firm. “First, do you have a unique point of view to offer? Second, are you taking any action concerning the social issue? If not, your statements may come across as pandering.”
4. Does this issue directly impact the well-being of our employees? Several leaders said that if an event directly impacts the well-being and safety of their employees, it is very important for their companies to respond. Supportive communications from leadership and individual outreach to affected team members are essential. Attorney Andrew Pickett said, “Our firm has a set of values that guide all aspects of our business. They include speaking up on issues that directly affect our employees and clients, such as racial injustice and discrimination. We believe it is our responsibility to use our platform to support and advocate for social issues that align with our values.”
5. Have we carefully considered the business impact of our statements?: Executives frequently shared with us that it’s important to assess the potential impact of their statements, including the possibility of backlash, before making public comments. Many strive to maintain a harmonious work environment and consider how statements will affect their stakeholders. This usually involves some organization before a social issue arises, such as developing contingency plans.“ Nowadays, various stakeholders in an organization’s ecosystem will publicly want to know an institution’s position on a social issue to determine if they will support the brand. Developing a rapid response framework is an effective approach to quickly determine if an issue falls under the organization’s areas of concern. This demonstrates an intentional and consistent approach to making decisions about when to speak up,” said Milka Milliance, co-founder of diversity, equity, and inclusion consultancy Different DEI.
6. Have we gotten employee involvement and feedback? Some companies rely on employee feedback and inclusive decision-making processes to determine their stance on social issues. Open dialogue and transparency are key in respecting diverse opinions and managing potential discord. Dominic Monn, CEO of MentorCruise, takes this approach. “We actively seek employee input before making public statements. This collaborative approach has helped us avoid significant backlash and fostered a sense of shared purpose,” Monn said. “Engaging employees in these decisions helps us ensure our stance reflects our internal community, strengthening our team’s cohesion and commitment.”
7. How will we manage internal divergence? Good leaders are aware of the potential for backlash from employees when addressing sensitive issues. Many stressed the need for empathetic communication and respectful dialogue. Businesses should foster an inclusive environment wherein diverse employee views are acknowledged and discussed openly.“ When a team member disagrees with our company’s stance on an issue, I make it a priority to have an open and honest conversation with them,” said real estate investor Ronald French. “I want to understand their viewpoint and why they hold it. This allows me to better address their concerns and ensure that they feel heard and valued. During these conversations, I always emphasize our company’s commitment to diversity, inclusion, and social responsibility.”
8. Could silence be more strategic than making a statement? Our analysis revealed that many business leaders opted for strategic silence or neutrality on contentious social issues, especially when the issues do not align with their business focus or could lead to divisive backlash. Tim’s Coffee founder, Tim Hopfinger Lee, cautioned companies to pick their social battles wisely. He believes it’s important to lend corporate voices to clear-cut issues like racial equality and women’s rights while avoiding more controversial topics.” Things get messy when companies start taking sides. It’s like opening Pandora’s box – you end up rubbing some people the wrong way no matter what,” Hopfinger Lee said. “However, if one consistently stays above the fray, that impartiality becomes a shield against criticism.”

Conclusion

Michael Jordan once explained that he avoided public political stances because “Republicans buy sneakers, too.” His light-hearted response highlighted the pitfalls of corporate activism in a capitalist economy.

Many businesses would like to follow Jordan’s example and avoid social issues. Unfortunately, neutrality is rarely an option in today’s fiery cultural climate. In addition to media scrutiny and consumer boycotts, employees exert pressure for activism from within.

Our research found that three-fourths of American workers want their companies to take clear stances on prominent social issues. We also discovered how corporate political positions directly impact employee loyalty, morale, respect for leadership, and workforce recruiting and retention.

Some business leaders believe the risk of backlash is too significant to justify controversial corporate stances. However, many insist that companies become stronger when they practice authentic activism on well-chosen issues in collaboration with their employees.

That’s a tricky tightrope to walk given the divisive issues currently facing society, but one that two-thirds of employers are bravely attempting.

Our Data

In November 2023, business.com researchers conducted an internet-based poll of 1,005 American workers. Seventy-seven percent were full-time employees, and 23 percent were part-time employees. Seventy-seven percent of respondents were white, 8 percent were Black, 7 percent were Asian, and 8 percent were of another ethnicity. The median respondent age was 38. Fifty percent were women, 49 percent were men, and one percent were of another gender.

Our research methodology included sourcing written responses from 67 business leaders through a reputable online platform designed for journalistic inquiries. These responses were obtained by posting an open-ended question about how executives and leaders make decisions regarding responding to social issues, ensuring a diverse range of insights. We conducted a thorough text analysis of the submissions to categorize and interpret the answers effectively.