By Michelle Ma
President Donald Trump's response to the weekend violence in
Charlottesville, Va., has sparked a new round of soul-searching in
U.S. corporate boardrooms over whether they should keep working
closely with the White House.
On Tuesday, the number of members who have withdrawn from a
White House advisory council grew to five, and executives including
Wal-Mart Stores Inc. Chief Executive Doug McMillon criticized the
president's initial unwillingness to specifically denounce the
racist hate groups that rallied in Charlottesville over the
weekend.
The fallout is testing already-tense relations between the White
House and corporate executives, many of whom face new pressures
from employees, consumers and activists to take stands on social
and political issues. At times, those issues have put them in
direct opposition with a president whose pro-business agenda they
are also seeking to shape.
"This is one of the toughest times for the consciences of
corporate boards and corporate CEOs," said Davia Temin, head of
Temin and Co., a reputation and crisis-management consultancy. Ms.
Temin said she expects more leaders to resign their advisory
posts.
Privately and publicly, some business leaders have also
indicated doubts about how worthwhile their White House access has
been, given the mixed progress with Mr. Trump's pro-business
agenda. Although the president's meetings with chief executives
this spring attracted heavy news coverage, they haven't yielded
significant results. Hopes of a corporate tax overhaul or an
infrastructure-spending plan being completed soon are fading among
executives.
Lawrence Summers, who served as Treasury secretary in the
Clinton administration and as a top economic adviser in the Obama
White House, said in an interview that business leaders serving on
Trump advisory councils should pull out.
"I don't think these are forums for either detailed advice or
critical advice," he said, adding that he didn't believe corporate
leaders serving on such councils received much in return.
Three CEOs of major publicly held U.S. companies sought Ms.
Temin's advice this week about whether to take a stance on the
Charlottesville violence.
All three are Republicans who voted for Mr. Trump; each told her
they would decline a seat on his councils if asked, Ms. Temin
said.
Navigating the Trump presidency has been thorny from the start
for CEOs. Tesla Inc.'s Elon Musk and Walt Disney Co.'s Robert Iger
quit advisory councils to the president over his decision to pull
out of the Paris climate accord. Others have had to justify their
presence on the councils amid continued pressure from employees and
some in the public over their roles.
Chief executives such as J.P. Morgan Chase & Co.'s James
Dimon have said they want to help Mr. Trump shape pro-business
policy, but have recently voiced frustration over Washington's pace
including on broad changes to the tax code.
Merck & Co. Chief Executive Kenneth Frazier was the first
executive this week to resign from the White House manufacturing
council, followed by the heads of Under Armour Inc., Intel Corp and
the Alliance for American Manufacturing.
Late Tuesday, AFL-CIO chief Richard Trumka also quit, saying, "I
cannot sit on a council for a president that tolerates bigotry and
domestic terrorism."
On Monday, Mr. Trump singled out white-nationalist groups for
criticism for the Charlottesville violence after he initially had
declined to do, though on Tuesday afternoon, he again said "both
sides" demonstrating in Charlottesville were to blame for the
clashes.
White House officials shrugged off the defections, saying
Tuesday the councils aren't an active part of day-to-day
policy-formulation. "We have an incredible number of CEOs that want
to give us their advice and guidance," one White House official
said.
Mr. Trump, in a news conference, characterized the CEOs as "not
taking their jobs seriously as it pertains to this country."
Earlier in the day, he called them "grandstanders" in a Twitter
post, and he suggested more leaders were waiting in the wings to
join his councils.
Inside boardrooms, leaders are torn between a desire to reduce
regulatory burdens and wariness of appearing to support the
administration, board members and crisis managers say.
Northwestern Mutual Life Insurance Co. hasn't taken a position
on the president or his policies, and the company isn't part of any
White House advisory councils.
But last weekend's events "will be fodder for a lot of boardroom
discussion" for the insurer, said Dale Jones, a board member and
CEO of Diversified Search Inc., an executive recruitment firm. "The
conversations will be much broader than Charlottesville."
Northwestern's board members believe less government regulation
"is good for policy owners in our industry," said Mr. Jones. "We
have to honor the authority of the president while at the same time
hold true to our values and respect for dignity of all people."
Yet some business leaders argue that without a seat at the
president's table, companies will have no influence on the issues
where they lock horns with the White House.
"There are just as many people who would say: Have a seat at the
table, try to bring things to him and his cabinet that are of
import from a moral point of view." aid an executive at a company
whose chief executive is a member of Mr. Trump's Strategic and
Policy Forum.
One reason CEOs may be more willing to publicly oppose the
president is that his tweet attacks on corporations no longer
appear to pack the same punch as they initially did after his
election, crisis managers said.
Merck's share price rose nearly 1% Monday after Mr. Trump lashed
out at the company's drug prices following Mr. Frazier's decision
to withdraw from the White House manufacturing council.
Jonathan Bernstein, president of Bernstein Crisis Management,
said he has been advising corporate clients not to participate in
any official Trump advisory panel or White House gathering of
business leaders. "It's just not worth the risk," he said. "Long
before Donald Trump, corporations had plenty of significant ways to
achieve what they wanted in Washington."
--Joann S. Lublin, Peter Nicholas, Jennifer Maloney contributed
to this article.
(END) Dow Jones Newswires
August 15, 2017 20:27 ET (00:27 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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