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How companies can decide when to speak out on social issues

It’s clear: workers expect their employers to respond to political events that have a monumental impact on their lives.

No matter how much change scares CEOs and boards, there is no turning back.

What remains murky is exactly how companies should decide which topics deserve their attention. The past two years have produced a multitude of devastating and often polarizing events: the murder of George Floyd, the January 6 uprising, Russia’s invasion of Ukraine and the overthrow of deer v. Wade. But companies only have a limited number of hours in a day, hours that must be balanced with lucrative day-to-day operations.

Three experts: Miriam Warren, diversity manager at Yelp; Andrea Hagelgans, who oversees Edelman’s social issues engagement practice; and Emma Goldberg, future of work reporter for the New York Times-addressed this issue during a Columbia Business School panel this week. A rough framework for decision-making emerged from the discussion:

Know your company values. Be clear about what matters and communicate it, understanding your risk alienating employees who disagree.

Consider how the issue affects all stakeholders. When Yelp came out as early abortion access advocateits leaders first considered the company’s communities: employees, consumers, advertising partners, business owners who rely on Yelp, the board of directors and investors.

Make sure your business is credible. Before you speak out on a topic or commit to action, consider your company’s track record. Then fill in all the gaps on your own land. Communicating your point of view without taking a beat can lead to inconsistent and ad hoc messaging.

Determine how your business is uniquely positioned to contribute. During the Black Lives Matter protests, Yelp was able to create listings of black-owned businesses for people who wanted to support them.

Plan ahead. Boards and executives can be proactive. The midterm elections in the United States are approaching, for example, but it is already clear hot issues employees and other stakeholders will pressure employers to deal with it.

Be transparent. Help employees understand how and why the company made a decision.

Gather diverse voices. “Frankly, boards are still pretty overwhelmingly white and pretty much male,” says Hagelgans. Make sure there are diverse voices thinking about these issues, especially from the employee’s perspective.

Lila MacLellan
[email protected]
@lilamaclellan

An advice

“Too often, there is an excessive focus on standard and common skills and not enough on those that are less obvious but essential. Once leaders have determined what kind of superpowers are needed for their organization, they must seek out those qualities and act to find them in potential candidates.

—Mauro Porcini, design director at PepsiCo, in an interview with Fortuneof the CHRO Daily.

On today’s agenda

👓 Read: A beauty company in the UK appointed a new non-executive director on board: nature. Apparently the idea is more than a gimmick. The company supports the movement to recognize legal environmental rights, and a climate scientist will join the board to act as a representative and spokesperson for nature.

📺 Watch: The Code of Kara Swisher 2022 interview with Tim Cook, Jony Ive and Laurene Powell Jobs discusses care and intentionality in product development, how companies can use their platforms ethically, and leadership lessons from Steve Jobs.

📖 Bookmark: Fortune Crypto, our new content hub, features stories about the companies and ideas that drive everything blockchain. Make it part of your reading rotation to stay informed about digital currencies, NFTs, Web3, and more.

on board/on board

Erika NardiniCEO of Barstool Sports, left the board of scandal WWE. The company added Michelle McKennaformer NFL CIO, and JoEllen Lyons Dillon, former general counsel and M&A lawyer, as new directors. Nike has named two new board members: Monica Giladministrative and marketing director of NBCUniversal Telemundo Enterprises, and Bob Swan, partner at Andreessen Horowitz and former CEO of Intel. HPE operated Regina DuganCEO of Wellcome Leap and former director of the Defense Advanced Research Projects Agency, to join its board of directors. Allan Thygesenwho until recently ran Google’s advertising business in the Americas, join the DocuSign conference room; he also becomes CEO. 😉

Halt the exodus of C-suites when CEOs leave

CEO departures appear to be returning to pre-pandemic levels, which means boards have yet another challenge: clinging to the remaining C-suite leaders.

The inescapable solution is to offer bonuses to executives to keep them around. But cash, whether cash or stock awards with deferred vesting, is not a long-term solution.

Marco Pizzitola, consultant at FW Cook, recently conducted research investigate the effects of retention scholarships. Looking at 65 large-cap U.S. companies between 2010 and 2016, he and his colleagues Joe Sorrentino and Stephan Bosshard found that bonuses kept C-suite officers from leaving for an average of two years, after which attrition resumed. Bonuses from Fortune 500 companies were generous, ranging from $1 million to $4 million, he says. Still, after $2 million, “you really don’t get much bang for your buck.”

Read my full story on how boards can retain the C suite here.

In short

– In some hybrid workplaces, CEOs have access to enclosed spaces that provide privacy, but don’t call them offices.

– The civil lawsuit for fraud brought by New York Attorney General Letitia James against former US President Donald Trump and his children could bring down the Trump organization.

– Anti-ESG crusader Vivek Ramaswamy sent letters to Disney and Appleurging corporations not to participate in political and social discourse.

– “Money should be a byproduct of deeply valuable ideas, not the idea itself,” writes designer, activist and entrepreneur Seth Goldenberg in this excerpt from his book, Radical curiosity.

Editor’s Choice

One day we will get rid of the emotional baggage – the guilt and shame – that comes with air travel. At least that’s what Pam Fletcher, Delta’s sustainability manager and GM veteran, says.

Fortune Lead writer Phil Wahba recently interviewed Fletcher about the airline’s commitment to net zero emissions by 2050. Here’s an excerpt from their conversation:

Arrow: I spent most of my career at the forefront of trends and new technologies, and ultimately what it taught me was how to be comfortable with ambiguity, a methodology to think about problems that do not yet have solutions. Take the example of electrification in the automotive industry: when I started in 2005, no one saw this as a future business model for automobiles, but that’s where it ended. And now it applies to the challenge of aviation and its decarbonization.

Read the rest here and have a safe weekend.