This article is part of our latest DealBook special report on the trends that will shape the coming decades.
The year is 2041, and Starbucks has real competition. Black Rifle Coffee Company, the java brand favored by conservatives, has opened thousands of locations around the country.
Starbucks, whose longtime chief executive Howard Schultz pioneered a new wave of liberal corporate activism in the early part of the century, still dominates the coffee scene in college towns and blue-state urban centers. But Black Rifle Coffee, now publicly traded with a $250 billion valuation, is flourishing in suburbs across the country and in cities large and small across the Deep South and Mountain West.
Online, the partisan rift is equally wide. Facebook has become essentially a one-party site, a forum for conservatives — and occasionally for conspiracy theorists — to discuss the perils of immigration and excessive government regulation. Snapchat has become the go-to social network for liberals to share videos calling for voting reform and raising taxes for social programs.
Even clothes have become fully politicized in 2041. As Americans sought for evermore obvious ways to flaunt their tribal allegiances, two brands that were previously middle-of-the-pack retailers — Levi’s and Wrangler — have become corporate juggernauts. At Democratic rallies around the country, the red Levi’s logo is just as ubiquitous as red Make America Great Again hats were during the 2016 presidential campaign. In Republican strongholds, Wrangler jeans are as common as Nike shoes.
This imagined future is not as far-fetched as it may seem. In recent years, major brands have become increasingly entangled in social and political debates and chief executives have become spokespeople for causes on the right and left. With few indications that the country will become any less polarized in the years ahead, it is perhaps inevitable that corporate America, like the electorate itself, splits into red and blue brands.
“This is permanently part of the social context of business,” said Jeffrey Sonnenfeld, a professor at Yale’s School of Management who has helped chief executives formulate their responses to hot-button issues. “It’s the job of C.E.O.s to elevate issues and explain how it matters to them.”
Brands have been tangled up with politics for decades of course. Pepsi and General Motors were among the companies to stop doing business in apartheid-era South Africa. IBM and Apple were among the first companies to offer benefits to same-sex couples in the 1990s. Yet for the most part, corporations did their best to steer clear of the culture wars.
The 2016 election of Donald J. Trump changed all that. Mr. Trump’s positions on issues ranging from immigration to race relations to climate change forced companies to make their positions clear. Oftentimes, under pressure from employees and customers, corporations broke with the president. After Mr. Trump equivocated in his response to an outburst of white nationalist violence in Charlottesville, Va., for example, two advisory councils stacked with prominent business leaders disbanded, with many of them repudiating the president and his response.
More than four years of this dynamic finally led many senior Republicans to begin pushing back against big business. This year, as companies rallied against restrictive new voting laws being advanced by Republicans around the country, Senator Mitch McConnell of Kentucky told chief executives to stay in their lane.
“My warning, if you will, to corporate America is to stay out of politics,” he said in April. “It’s not what you’re designed for. And don’t be intimidated by the left into taking up causes that put you right in the middle of America’s greatest political debates.”
Senator Marco Rubio of Florida posted a video in which he called companies speaking out against Republican laws “woke corporate hypocrites.”
And Stephen Miller, an adviser to Mr. Trump, said on Twitter that big businesses were “openly attacking sovereign U.S. states & the right of their citizens to secure their own elections,” in what he called “a corporate ambush on Democracy.”
There are some indications that executives are trying to disentangle themselves from politics. When Texas lawmakers passed a restrictive abortion law this summer, few corporations spoke out on either side of the debate. Google, which three years ago stopped work on a Pentagon contract after an employee uprising, is quietly back in the bidding for defense work. Such developments suggest that a hyperpartisan future may not be the inevitable outcome for corporate America.
Yet for every example of companies trying to moderate their affiliation with controversial issues, there are new instance of chief executives wading deeper into political scuffles.
Last year, Goya Foods became a political lightning rod after its chief executive, Robert Unanue, emerged as a vocal supporter of Mr. Trump. Some Latinos boycotted the brand, while Republicans rallied around it.
John Schnatter, the founder of Papa John’s International, was ousted from the pizza chain he founded after uttering a racial slur on a corporate conference call. He recently called his exit from the company he started “a crucifixion,” blaming the “progressive elite left” for his downfall.
Kenneth I. Chenault, the former chief executive of American Express and one of the Black business leaders who led the corporate response to a wave of restrictive voting rights laws this year, recently said that he was unmoved by calls for chief executives to stay out of politics and that he viewed it as his obligation to keep speaking out on issues he believed in.
“We can have partisan disagreement,” he said. “What we have to be aligned on as a country are what are the fundamental values and principles that we are going to stand for.”
Determining when to speak out and when to stay silent is one of the most fraught calculations for leaders these days. Keep quiet on a given issue, and impassioned employees and customers might accuse the company of callousness. Engage in a public debate about a partisan topic, and members of the opposing party may accuse the brand of playing politics.
“How do you determine what’s important to your stakeholders?” said Tim Ryan, the U.S. chairman of PwC, the accounting and consulting firm. “They’re trying to figure that out. What’s important to my employees, customers and investors?”
Research shows that the public increasingly expects chief executives to speak out. Edelman, the public relations firm, routinely surveys people about the role of business in politics and this year found that 86 percent of respondents expect corporate leaders to publicly engage on major societal issues.
Yet as brands have found out all too often in recent years, doing so can lead to calls for boycotts, bruising battles on social media and distracted work forces.
When the Coca-Cola chief executive James Quincey waded into the debate about a new voting law in Georgia, no one was satisfied. Democrats who opposed the legislation accused Mr. Quincey of doing too little, too late; Republicans who supported the new law were enraged when he said anything at all.
It was the kind of no-win situation executives try to avoid at all costs, and yet Mr. Quincey had little choice but to engage. Even before he spoke up, protesters in Atlanta were calling on the company to engage and social media was abuzz with questions about what Coca-Cola, one of the city’s main employers, would do.
And while many corporate boycotts fizzle after a few news cycles, consumers are increasingly willing to vote with their dollars. Almost two-thirds of consumers globally are willing to support or shun companies because of their positions on political or social issues, according to Edelman.
There is always a chance that the political waters will calm down, that the toxic partisanship gripping this country will abate, that Americans will find common cause in a new era of bipartisan comity. Should that unlikely development occur, corporations might be able to gracefully disentangle themselves from the red-hot debates about the big issues of the day.
More likely is a world where chief executives and the companies they lead are more and more often affiliated with one party or the other. When Mr. Trump ran for re-election, news sites feverishly tracked which executives were supporting his campaign, and which had sided with Joe Biden. In the months since the Jan. 6 insurrection at the U.S. Capitol, research groups have tracked which companies are donating to Republicans who voted against certifying the Electoral College results.
Darren Walker, the chief executive of the Ford Foundation and a director at several major companies, said that the shape that the future of chief-executive activism takes may in some ways depend on who is in charge two decades from now. Greater diversity at the highest levels of the business world, Mr. Walker said, would almost certainly lead companies to take more forceful stands on issues that mattered to members of those communities.
“If 20 years from now the Fortune 500 has dozens of people of color and women as C.E.O.s,” he said, “if there are boards and committees that are diverse, I think it’s a resounding yes that corporations will be more engaged.”
Source: NYT > U.S. > Politics