Last week the Writer’s Guild of America sent a letter to its members attempting to explain why it had not publicly condemned the Hamas attacks on 7 October.
“It can be an imprecise science for a labor union to pick and choose where it weighs in on both domestic and world affairs,” the letter read. “We did not issue a statement, not because we are paralyzed by factionalism or masking hateful views” but rather because “we are aware of our limitations and humbled by the magnitude of this conflict.”
So what? The conflict has put businesses (and workers) in a bind. For all the talk of a purpose beyond maximising shareholder value, in this situation corporates are powerless to make a difference. A list of over 180 company statements condemning Hamas’s terror is remarkable for:
- its brevity compared with a list of companies condemning Russian aggression;
- its skew towards companies listed in the US; and
- its failure to suggest solutions other than aid to either side.
Since the pandemic pressure has mounted on CEOs to speak out on a range of social issues – from abortion rights to Black Lives Matter.
This time the response has been more muted. After the invasion of Ukraine companies were quick to consult PR teams on what they should say and when. This time they’re pondering whether to say anything at all. That too comes with risks.
“People now see a lack of action not as neutrality, but as a point of view as well,” says Megan Reitz, Professor of Leadership and Dialogue at Ashridge Business School. “Being able to point to a process, which won’t be perfect, but that explains how a company makes its decisions, is crucial.”
Building such a protocol requires boards to carefully consider:
Stakeholders. Does employee sentiment align with consumers? A recent Gallup survey shows support for businesses taking a stand on current events has dipped from 48 to 41 per cent over the last year. In data collected before 7 October just 27 per cent said that companies should speak up about international conflicts.
Geography. Multinationals like McDonald’s face an elevated risk. When one of its franchises in Israel started providing free meals to IDF soldiers earlier this month, branches elsewhere in the region quickly distanced themselves. After several stores were vandalised, McDonald’s released a statement denying it was “funding or supporting” any governments involved in the conflict. “For decades we’ve had this naive assumption that it’s possible to have a single corporate narrative,” says Reitz. “[Israel-Hamas] is a multipolar issue. But it’s not the only one.”
Expertise. Mentions of “geopolitics” in US annual filings have roughly doubled since 2021 and boards are on the hunt for relevant expertise. Lazard recently hired former National Security Adviser Sir Stephen Lovegrove, while former MI6 chief Sir Alex Younger joined Goldman Sachs as an adviser in 2021. Both firms have recently launched geopolitical advice units. “[Boards] can and should build a “kitchen cabinet” of external risk advisors who can provide real-time insights on specific risk hot spots,” says Claudia Pici-Morris, a partner at Spencer Stuart.
Companies’ primary responsibility should be to address the mental and physical health of employees directly affected by the conflict. Public statements can come later, and should take into account the views of a range of stakeholders.
What’s certain is that this won’t be the last time companies are expected to respond. It’s time to start building a playbook.
