logo
Corporate Leaders Need to Keep Their Mouths Shut

Corporate Leaders Need to Keep Their Mouths Shut

New York Times29-01-2025

After more than a year of exhausting controversies over free expression at colleges and universities, America's business leaders would do well to take a simple lesson from embattled leaders in higher education:
Keep your mouth shut.
The lesson has become even more important with the recent gravitation of some corporate leaders toward President Trump. Such public fawning, which would have been unthinkable just a few years ago, demonstrates how unprincipled and fickle corporate political positions have always been.
Increasingly, universities have adopted neutrality policies to recommit to their core mission. So can corporations. The key is committing to institutional neutrality, which requires leaders to stay silent on social and political issues that do not directly affect their operations. This means reining in corporate political statements — progressive and conservative — as well as the political activity of chief executives like Elon Musk and political flip-flops by companies like Meta. Our own university, the University of Chicago, committed to this ideal in 1899 and restated that commitment in the seminal Kalven Report of 1967. This has freed individuals in our community to express their own opinions and ideas in lively debate.
For decades, few other universities have made this commitment. But its value for them — and for business corporations — has become clearer over the past year. The Gaza war created a no-win situation for university leaders accustomed to speaking out on political issues. On the one hand, bland institutional statements on current events have no impact, satisfy no one and relegate the institution to a role as a second-rate political actor. On the other, statements with real substance threaten to alienate and silence those who disagree. As a result, more than two dozen schools, including Harvard and the University of Pennsylvania — whose presidents resigned, in part, after stumbling at a congressional hearing on campus antisemitism — have now adopted neutrality policies akin to Chicago's. More are in the works.
Corporate leaders in the private sector can benefit from these hard lessons.
Along with students and faculty members, some employees, shareholders and customers take the view that 'silence is violence.' They demand that management take positions on issues outside the remit of the company, even if there are other stakeholders — older employees, customers of a different political affiliation — who would disagree. Corporate boards and chief executives have increasingly given in to the demands, creating a virtue cascade. As more companies speak out, it creates competitive pressure on others to join in. They have taken to issuing vanilla statements conveying no real information about their culture or purpose. And predictably, the few times when statements veered away from the mainstream, the corporations were pressured to backtrack.
Notoriously, Disney's now former chief executive Bob Chapek drew criticism from employees and a furious response from Gov. Ron DeSantis of Florida with his reaction to the state's Parental Rights in Education legislation, also known as the 'Don't Say Gay' bill. Waffling from silence to explaining that silence to a firm statement of opposition, Mr. Chapek's approach was a fiasco that alienated almost everyone, including Mr. DeSantis and the Disney employees who opposed the bill.
While some other corporate leaders may be enjoying the favor they have found in taking sides, they would be wise to heed the lesson of Ivy League schools that discovered the benefits of institutional neutrality a little too late. These corporations would benefit from adopting a formal policy that guides their leaders on when, if ever, they may speak out.
A policy of this sort should have two foundational components.
First, there must be a commitment by the corporation and its leaders to refrain from speaking. This is valuable because it allows one to assert that silence is a considered (and consistent) policy. In fact, institutional silence should be the default assumption. With regard to individual chief executives like Elon Musk, this default policy should require silence in any context where their speech, like that of university presidents, might be attributed to the entire company. Mr. Musk may present a unique case because his pervasive policy influence, for now, on the Trump administration, and because its regulatory activity could actually benefit Tesla and Mr. Musk's other companies. But for most chief executives, political advocacy that is unrelated to the corporation's core operations tends to be self-defeating. It remains to be seen whether Mr. Musk's political gambit will be an exception or prove the rule.
Of course, there will sometimes be a compelling business case for corporate speech. Ben & Jerry's, for example, has adopted a strong social justice branding that does not seem to hamper its bottom line. Other times, a unified or crucial employee bloc or customer base may have such strong views that the corporation adopts a formal policy of speaking on a specific issue.
In 2020, the commissioner of the National Basketball Association issued a statement on racial injustice and police brutality that was consistent with the positions and boycotts taken by a unified bloc led by its marquee players.
The recent policy flips that Mark Zuckerberg announced at Meta — ending its fact-checking program and loosening content moderation — may constitute another gray area. On the one hand, these are operational decisions. On the other, their original adoption and more recent recission were undoubtedly related to politics. And a company or university's need to backtrack — just as in the cases of Mr. Chapek at Disney and the presidents at Harvard and Penn — powerfully demonstrates the no-win nature of playing amateur politics.
For large corporations, such operational exceptions should be rare. In a world of diverse viewpoints, the decision to favor one constituency over another is fraught and should not be made lightly. With varied employees and customers — young and old, liberal and conservative — meaningful statements are more likely to alienate than to satisfy. At the very least, the decision to speak on political issues should be part of a deliberate corporate governance policy.
Second, there must be a clearly stated — and ideally, narrow — exception for statements that are necessary to maintain or defend the company's ability to operate. Boards should think about exactly which types of circumstances warrant an exception and then leave it to the judgment of management about how to apply the policy. One could imagine a company saying, 'It is our policy that Best Widget Inc. will not make institutional statements on political matters that do not directly affect our ability to operate. We influence society through producing the best widgets.' This would allow speech on widget regulation, as well as on policies implicating the business's direct relationships with employees and customers. But it would not include a corporate policy extrinsic to its business interests.
Without neutrality policies, we can expect many of the same chief executives who have been currying favor with Mr. Trump to turn back left with the next political wind.
In both the business and university contexts, silence often takes courage and a commitment to institutional modesty. For a corporation, a general policy of silence can remind stakeholders that the business of the business is, well, business.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

From fishing family to Big Tech: French CEO takes on Silicon Valley
From fishing family to Big Tech: French CEO takes on Silicon Valley

Yahoo

time7 minutes ago

  • Yahoo

From fishing family to Big Tech: French CEO takes on Silicon Valley

At just 39 years old, Fidji Simo is poised to become OpenAI's second-in-command after leaving her mark at two other major tech firms, including Meta. Reporting directly to CEO Sam Altman, the move to the ChatGPT-maker represents the latest chapter in a career that has taken Simo from a fishing family in France's Mediterranean port of Sete to the heights of Silicon Valley. As the current CEO of grocery delivery platform Instacart, she cuts a unique profile: a French woman in the male-dominated American tech landscape -- who resists advice to blend in. "I can put all my energy trying to be someone else or I can be myself and pour all of that energy into what I can create," she told CNBC in February. This philosophy will likely be on display when she appears Thursday at the VivaTech conference in Paris. Raised in Sete, Simo attended the elite HEC business school before joining eBay in 2006, first in France then in California. "People expect a very business-like story for why I decided to come to the US. It wasn't. The American Dream was on TV every night and that was an incredibly appealing thing," she said. - 'Never Intimidated' - In 2011, Simo joined Facebook, now Meta. She was given responsibility for video and monetization in 2014, a role she considers the defining moment of her career. Simo championed the company's pivot to video, which became central to Meta's strategy despite initial internal skepticism. "She never let herself be intimidated," recalled David Marcus, who worked at Meta alongside Simo and now serves as CEO of online payment company Lightspark. "She had an ability to challenge Mark (Zuckerberg) and push him, when others would have hesitated." Joining Instacart in 2021, Simo inherited a company that had been bleeding money for a decade. Under her leadership, the grocery delivery platform achieved profitability in 2022 through aggressive diversification: data monetization, expanded retail partnerships and a robust advertising business. Now Simo faces her biggest test yet. As OpenAI's number two, she'll free up CEO Altman to focus on research and infrastructure while she tackles the company's operational challenges. Despite being one of history's most highly funded startups and ChatGPT's phenomenal success, OpenAI is burning cash at an alarming rate. The company has also weathered significant leadership turnover, including Altman's own brief ouster and reinstatement in 2023, raising questions about management stability. But French investor Julien Codorniou, who worked alongside Simo at Facebook, said she will more than rise to the occasion. "Fidji's arrival is a declaration of ambition by OpenAI," he said. tu/arp/acb/des Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

Senate GOP unveil long-awaited SNAP proposals for Trump bill
Senate GOP unveil long-awaited SNAP proposals for Trump bill

The Hill

time13 minutes ago

  • The Hill

Senate GOP unveil long-awaited SNAP proposals for Trump bill

Senate Republicans on Wednesday rolled out a suite of proposed changes to the Supplemental Nutrition Assistance Program (SNAP) as a key component of President Trump's 'big beautiful bill' – but it dials back some of the proposals sought by the House that drew intraparty concerns. The new legislative text from the Senate would require states to cover some of the cost of SNAP benefits, which are currently completely funded by the federal government, if they have a payment error rate above 6 percent beginning in fiscal 2028, while allowing states with rates below that level to continue paying zero percent. It also proposes states with higher payment error rates cover a greater share of benefit costs. If the error rate is 6 percent or higher, states would be subject to a sliding scale that could see its share of allotments rise to a range of between 5 percent to 15 percent. The House, by contrast, called for all states to cover 5 percent of the cost of allotments in its agricultural proposal passed as part of a broader plan to advance Trump's tax agenda last month, with states that had higher payment error rates having to pay anywhere between 15 to 25 percent. The softened proposal comes as Senate Republicans expressed concerns about how the House pitch would have impacted states. 'This bill takes a commonsense approach to reforming SNAP-cutting waste, increasing state accountability, and helping recipients transition to self-sufficiency through work and training,' Senate Agriculture Chairman John Boozman (R-Ariz.) said in a statement on Wednesday. 'It's about being good stewards of taxpayer dollars while giving folks the tools to succeed.' 'At the same time, our farmers and ranchers are facing real challenges,' he said. 'This legislation delivers the risk management tools and updated farm bill safety net they need to keep producing the safest, most abundant and affordable food, fuel, and fiber in the world. It's an investment in rural America and the future of agriculture.' Like the House bill, the Senate bill would also decrease the administrative cost the federal government is required to pay to help cover program operations in the states by 25 percent, but beginning in fiscal year 2027. The proposals in both chambers also seek to limit the federal government's ability to increase monthly benefits in the future and beef up work requirements, as well as farm provisions that GOP leaders have argued will make it easier to craft a bipartisan farm bill in the months ahead – although Democrats have said otherwise. Republicans on the Senate Agriculture Committee estimated the recent legislation would generate $144 billion in net savings in the years ahead as the party looks to ramp up cost-cutting measures in Trump's plan amid concerns about the overall deficit impact of his tax priorities.

Marines still not on LA streets, seen in hand-to-hand combat training
Marines still not on LA streets, seen in hand-to-hand combat training

Yahoo

time14 minutes ago

  • Yahoo

Marines still not on LA streets, seen in hand-to-hand combat training

The 700 Marines deployed to Los Angeles by President Donald Trump have not yet hit the streets and are instead on standby and carrying out nonlethal training. Dozens of Marines were captured on aerial footage Tuesday practicing hand-to-hand combat and crowd control on Seal Beach field, just south of L.A. County. Trump activated the Marines and about 4,000 National Guards after violent mobs took to the streets over the weekend, burning and damaging property while some threw rocks and Molotov cocktails at law enforcement. Aoc Downplays La Riots As Mere 'Teens' Throwing Rocks, Pins Blame On Trump A U.S. Northern Command spokesperson told Fox News the Marines have not completed their nonlethal weapons training. They are expected to do at least another day of nonlethal weapons training, two U.S. defense officials told Fox News. It is expected they will finish the training on Friday. Read On The Fox News App "The Marine unit is an infantry unit and needs to learn protocols for [the] use of force in a domestic setting," a defense official told Fox News. The cost of sending the Marines and National Guard to Southern California is an estimated $134 million, Acting Pentagon Comptroller Bryn MacDonnell said. The funds will be pulled from the operations and maintenance budget, MacDonnell said. USMC Commandant Gen. Eric Smith on Wednesday said the Marines are acting under NORTHCOM's direction and are limited to protecting federal property and personnel, not engaging in broader law enforcement. He said that they had already received four days' worth of training. California Sheriff Says Newsom 'Encouraged' La Riots As Ice Arrests Violent Illegal Aliens Defense Secretary Pete Hegseth, meanwhile, said the Marines and National Guard troops were being deployed to keep the city safe. "The mission in Los Angeles, as you know well, sir, is not about lethality. It's about maintaining law and order on behalf of law enforcement agents who deserve to do their job without being attacked by mobs of people," Hegseth said under grilling from Sen. Jack Reed, D-R.I., during a Senate Appropriations Committee hearing. "We are very proud that the National Guard and the Marines are on the streets defending the ICE agents, and they will continue." Hegseth said "there is plenty of precedent for the U.S. supporting law enforcement officers." A federal judge on Tuesday night declined California Gov. Gavin Newsom's request for an immediate temporary restraining order to restrict Trump's deployment of Marines and National Guard troops to quell ongoing anti-Immigration and Customs Enforcement (ICE) riots in Los Angeles. Newsom has had a public war of words with Trump administration officials, accusing the president of having "commandeered" thousands of the state's National Guard members "illegally, for no reason" without consulting California's law enforcement leaders. The Trump administration, meanwhile, said its ICE operations are aiming to get "criminal illegal immigrant killers, rapists, gangbangers, drug dealers, human traffickers and domestic abusers off the streets." Fox News' Liz Friden contributed to this article source: Marines still not on LA streets, seen in hand-to-hand combat training

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store