Executives Rethink Social-Media Policies After China Dust-Up
October 13 2019 - 7:29AM
Dow Jones News
By Rachel Feintzeig and Lauren Weber
Chief executives are taking vocal stands on issues like gun
control, climate change and immigration, but global affairs bring a
different complexity and calculation, especially for companies
doing business in China.
In the aftermath of Houston Rockets general manager Daryl
Morey's now-deleted tweet, the National Basketball Association has
found the consequences of even implicitly criticizing Chinese
policy can be swift and sizable.
The NBA isn't the only organization that has run afoul of the
Chinese government. Apple Inc. and Alphabet Inc.'s Google both
recently removed apps associated with Hong Kong's antigovernment
protests from their digital stores after taking heat from Chinese
officials.
Executives have to thread a needle when a company's commercial
and financial interests clash with the CEO's personal values and
the cultural values of an enterprise and its home country, said
Jeffrey Sonnenfeld, a leadership expert at the Yale School of
Management. "One of the rarely discussed downsides of globalization
is you get caught in those crosscurrents," he said.
Yet CEOs are under pressure to be visible on social and
political issues, evidenced in part by a statement released in
August by the Business Roundtable. The group, which represents some
of America's biggest companies, redefined its view on the purpose
of a corporation. It said executives should make business decisions
based on the interests of multiple stakeholders -- including
employees, customers and society writ large -- rather than focus
only on profits for investors.
When it comes to public expression, companies set the rules.
"Free speech only exists if you're in a government position,"
says Doug Smith, managing principal of the Pittsburgh office of law
firm Jackson Lewis.
There are some exceptions. Workers can raise concerns about
safety and working conditions, for example, but bosses aren't
covered by that protection.
When it comes to policing speech, "you can actually be a little
more stringent with manager levels and above," Mr. Smith said.
"They're the face of the company," he added. "How does the CEO
say, 'I'm saying this but it has nothing to do with my role running
the company?'"
More companies in the past two years have started bolstering
their executive contracts with an eye to social media, Mr. Smith
said. They have incorporated clauses giving them more leeway to
fire executives for posting something inappropriate online,
including a provision saying the employer is allowed to terminate
an executive if she or he does something likely to hurt the
company's reputation or operations.
A couple of clients have specifically laid out social-media
rules in employment contracts, Mr. Smith said, in some cases
specifying that executives have to run posts by a company
gatekeeper.
Paul Argenti, a professor of corporate communication at
Dartmouth College's Tuck School of Business, said corporate leaders
are in a tricky spot. "Are you going to be okay when your company
loses sales because of what you said?" he said.
Mr. Argenti, in his consulting work, counsels executives to stay
mum on topics that aren't core to their businesses.
"The job of a CEO is not to save the world or make the world
safe for democracy," he said. Corporate leaders should speak on
issues that matter to their companies, like climate change for an
oil company or pesticides for an agriculture business, he said.
Other than that, they should stand down.
Rick Wartzman, a director at the Drucker Institute, an
organization focused on leadership and management, sees another
risk coming from the attention surrounding social-media posts. The
fracas sparked by ephemeral statements can distract from more
substantive questions of social responsibility, he said.
"What concerns me is whether statements, while important, become
a substitute for the more meaningful work around what it means to
be a responsible company and take care of all your stakeholders,"
he said.
Write to Rachel Feintzeig at rachel.feintzeig@wsj.com and Lauren
Weber at lauren.weber@wsj.com
(END) Dow Jones Newswires
October 13, 2019 07:14 ET (11:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Alphabet (NASDAQ:GOOG)
Historical Stock Chart
From Aug 2024 to Sep 2024
Alphabet (NASDAQ:GOOG)
Historical Stock Chart
From Sep 2023 to Sep 2024