By Chip Cutter, Suzanne Vranica, and Alison Sider
Big consumer brands like Coca-Cola Co. and Delta Air Lines Inc.
for years have positioned themselves as forces for promoting what
they see as social good -- an approach they displayed last summer
after the death of George Floyd.
Coca-Cola turned off its Times Square billboard for a day. Delta
flew Mr. Floyd's body to his family in Houston. The Atlanta-based
companies were among the scores of big corporations around the
country that pledged an array of money and initiatives toward
racial justice amid the upheaval that Mr. Floyd's death while in
police custody unleashed.
Now, business leaders are facing new pressures from progressive
activists to prove that those commitments were more than just talk.
As activists press companies to condemn new voting legislation,
CEOs are again finding themselves walking a difficult line on
emotional, political issues, risking blowback from all sides.
CEOs "put themselves on this path" by engaging on social issues
in response to their employees and partly as a form of marketing,
says Harris Diamond, former chief executive of ad giant McCann
Worldgroup. "Once you open up that door, you have to live by
The recent contentious fight over a Republican-led voting law in
Georgia has illustrated the challenges. Civil-rights activists
pressured Delta and Coca-Cola to take public stands against the
law, which the groups have called restrictive and racist. Some of
the companies' own employees echoed those concerns.
After an initially muted public response, CEOs at both
companies, which said they had been lobbying lawmakers behind the
scenes, ultimately spoke out against the law.
In the end, their statements came too late to please many
activists on the left and angered many on the right. Georgia House
members voted to revoke a tax break for Delta, though the effort
didn't go farther before the legislature adjourned last week.
Senate Minority Leader Mitch McConnell accused big businesses of
"behaving like a woke parallel government," and threatened "
serious consequences" for companies, though he later tempered his
stance. The companies found themselves in the strange position of
facing boycott calls from critics on both sides.
"You're walking a very treacherous line when you get involved in
highly charged, emotional, political issues," said Ken Langone, the
billionaire co-founder of Home Depot Inc., another Atlanta company.
Though Home Depot issued a statement in support of access to
voting, it hasn't experienced the same backlash that Delta and
Coca-Cola have. Mr. Langone, now retired, praised the company's
approach and said its statement simply outlined what it has done to
encourage voter registration, without political rhetoric.
"Keep in mind: If America is about as evenly divided as it
appears it is, you're going to piss off one side or the other side
with your customers, and they're about equal," Mr. Langone
The pressure on companies in recent years has largely come from
groups on the left and has focused on issues such as racial
justice, LGBT rights and the environment. Because many big
multinational companies have tended to align themselves with
liberal causes, progressive activists have been able to leverage
the companies' past statements in pressing them to take further
stands on these issues.
Lawmakers and advocacy groups on the right have also called for
consumer boycotts against companies -- former President Donald
Trump last week urged supporters to boycott Delta, Coca-Cola and
other companies that spoke out against the Georgia voting law, and
has previously called on supporters to boycott companies like
Goodyear and Macy's. But boycotts, which rely on consumers to
change their habits, haven't always been effective.
The Georgia disputes have set the stage for more corporate
clashes with legislators in Texas, Arkansas and other states. Texas
legislators are considering their own bill that would affect voting
rules -- something corporate leaders including Merck & Co. CEO
Kenneth Frazier and Dell Technologies founder Michael Dell, whose
company is based in Texas, have said they oppose.
Earlier this week, the Arkansas legislature overrode the
governor's veto to make the state the first to outlaw
gender-transition treatment for children. Companies including Mars
Inc., Nestlé USA and Unilever PLC, whose brands range from Dove
soap to Hellmann's mayonnaise, publicly decried the legislation,
along with bills in other state legislatures that they said
discriminated against the LGBT community.
A New CEO Playbook
To anticipate such political flashpoints, many corporate leaders
say they have developed informal networks of executives, counseling
each other on when and how to respond to contentious social issues.
Bill George, former chairman and CEO of Medtronic PLC and now a
senior fellow at Harvard Business School, said he coaches new CEOs
in such sessions, running them through scenarios and questions in
which they have to rattle off, point blank, their policies on such
issues as combating climate change and promoting racial
"It's a new world, and you have to have a new type of CEO," he
said, adding that in the past, most CEOs just wanted to run a
profitable business. "If you look at the typical CEO's preparation,
there's nothing in their background that prepares them for these
types of activities."
Even staying quiet carries its own risks for companies. Michael
Leven, a former president of Las Vegas Sands Corp. who has also led
several Georgia companies and organizations, said that for Delta
and Coca-Cola, waiting to speak out against the Georgia law was a
mistake. "That's the worst thing that could possibly happen,
because then you're looking at being reactive as opposed to
proactive," he said. "Coming out after the protests shows an
According to a 2020 survey of 8,000 consumers by
public-relations giant Edelman, about 63% said they choose, switch
to, avoid, or boycott a brand based on its stand on social issues.
And in a more recent Edelman poll of 33,000 consumers, 86% said
they expect CEOs to publicly speak out on social issues, while 68%
said companies should step in when the government fails to fix
Another increasingly vocal constituency: companies' employees.
Mr. George said the position of employees at many companies with
younger workforces is, "I'm not sure I want to work here unless you
have a stance on this."
Some business leaders say they have avoided taking political
stands because their workforces have diverse points of view. Jim
McCann, founder and chairman of 1-800-Flowers.com Inc., said his
company is wary of speaking out on such issues because it has
workers in 40 states who span the political spectrum.
"I don't think we have any particular right or permission to
impose our point of view on our team or to suppose that our point
of view is how all our team members feel," said Mr. McCann, who was
CEO until 2016. He said the company promotes respectful
Some Delta employees were among those who voiced frustration
with the company's initial response to the Georgia voting law. In a
video message released to employees early last week, Chief
Executive Ed Bastian acknowledged the internal feedback: "I know
many of you are disappointed, frustrated and angry that we did not
take a stronger public stand against specific measures in the
bill," he said. He said Delta had worked behind the scenes to lobby
lawmakers, and that if it had publicly denounced the bill too
early, it would have cost the company political influence: "We
would have lost a seat at the table," he said.
Companies pushed to remove initial provisions proposed in the
legislation that ultimately were not included, including the
elimination of early Sunday voting, according to people familiar
with their lobbying. They opted not to fight a ban on non-poll
workers handing out food or water within a certain distance from
voting lines, since poll workers can still give away water and the
companies felt they had limited political capital to spend.
Still, the law as passed was denounced by activists and many
Democrats, who say it will disproportionately affect Black voters.
President Biden last week described the law as "Jim Crow in the
21st century." Republican legislators in Georgia have said that
this rhetoric is hyperbolic and that the new rules were needed, in
part to assure the public that voting is fair and to ease concerns
there might have been fraud this past election season. No court or
legislative body has found evidence of widespread voter fraud.
Some Black business leaders have been vocal in opposing the
Georgia voting law. Ursula Burns, the former CEO of Xerox Holdings
Corp. and a board member at Uber Technologies Inc., Nestlé SA and
Exxon Mobil Corp., was among 72 Black executives to sign an open
letter protesting the law and calling for companies to oppose
similar legislation. She said she understood the delicate calculus
and potential repercussions business leaders must weigh in taking a
position on such a politically charged issue. "It's not normal or
habitual for them," she said.
Still, she added: "I literally wouldn't have been able to go to
sleep and wake up the next day and feel comfortable I do business
in a state that literally says to a person who looks like me, 'I'm
going to make it as hard as I legally can to make it for you to be
able to vote.' "
Bracing for Future Fights
As CEO Doug Parker and other executives at Fort Worth-based
American Airlines Group Inc. watched the fallout mount in Georgia,
they began to hear from employees about the issue, and considered
what to do about proposed legislation in the Texas Senate,
according to people familiar with the company's deliberations.
The airline's leadership team expected that speaking out on
voting restrictions in Texas could alienate many state officials
and consumers, but felt it needed to speak given its large size and
diverse workforce and customer base, the people said. Executives
ran the final statement by an internal diversity and inclusion
group for additional guidance, according to the people familiar
with American's deliberations.
Hours after the Texas Senate passed its voting bill, which is
expected to be debated soon by the state's House of
Representatives, American said it was "strongly opposed to this
bill and others like it."
Texas Lt. Gov. Dan Patrick struck back against the criticism
during a news conference.
"Senate Bill 7 is about voter security, not voter suppression,
and I'm tired of the lies and the nest of liars that continue to
repeat them," Mr. Patrick said. "Let me tell you what, Mr. American
Airlines, I take it personally....You are in essence, between the
lines, calling us racists and that will not stand." He accused the
airline's leaders of not reading the bill.
"Of course we read the bill," an American spokeswoman said.
"It really is hard to take a middle ground. One, the world won't
let you, and two, it doesn't really serve anyone trying to cater to
both sides," said an American senior executive.
--Te-Ping Chen and Emily Glazer contributed to this article.
(END) Dow Jones Newswires
April 10, 2021 00:15 ET (04:15 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.