The President of Hebrew University scolded his peers at Harvard and Stanford for public statements failing to “minimal standards of moral leadership, courage, and commitment to truth.” Across academia, directors are resigning, and donors are walking away. With bills for virtue signaling coming due, how should your organization respond?
Sticking to Business Out Of Respect For Readers
This column deals with business ethics, compliance, and governance. So, this column will skip over the precise events and circumstances that led to the scolding and resignations, etc. Public discussion of these events and circumstances is of course warranted and even essential, but this column is poorly placed to do such discussion justice. And many better forums exist.
What is suitable for discussion here is how business leaders (both for-profit and nonprofit) should guide their organizations across a dangerous communications and public-relations landscape.
Unnecessarily Leading the Organization into a Cross-Fire is Wrong
It has become common for organizational leaders to make public statements about all sorts of current events and issues. In some cases, such leaders unnecessarily walk themselves — and their organizations — into social or political cross-fires.
This is not just foolish, but wrong. The for-profit leaders’ job is to run his or her company for the benefit of its shareholders; where the company is a public benefit corporation, the public benefit should also be taken into account.
For non-profit corporations like Harvard and Stanford, their purposes are set forth by their charters or bylaws, subject to state and federal law.
Leaders must take their cues from their duties, not their personal preferences, however worthy or noble. We live in fragmented and angry times. Even topics and events that seem uncontroversial may prove contentious. A wise and dutiful leader should think through the necessity of entering a cross-fire, as well as the possibility of an unnecessary statement triggering one.
The Slippery Slope
The Book Proverbs tells us: “Even a fool is thought wise if he keeps silent, and discerning if he holds his tongue.”
Unnecessary statements create an expectation of statements down the road on other topics.
At that point, failure to make a statement counts as a statement. And any statements made will be sized up against earlier statements to judge the leader’s and organization’s relative commitment to this and other subjects of statements.
Jealousies, resentments, and accusations become inevitable. It would be easier — and more peaceful — to try divvying up a quart of ice cream among a dozen four-year-olds.
According to Amos Gelb of the Washington Media Institute, “Anarchy on the Internet and social media creates a no-win environment. No matter what they say, organizations and their officers will be pilloried .”
This, in fact, is the fix Harvard, Stanford, and other institutions find themselves in. In making prompt, strong, and heart-felt statements about numerous issues and events, university and other leaders set expectations. They also multiplied the potential for cross-fires, as well as places for ambush.
Three Questions to Ask Before Issuing a Statement
Organizations need to set a policy that distinguishes between contributing something necessary or valuable and virtue signaling. Then, they should stick to that policy.
Here are three questions that leaders should ask and answer before drafting a statement:
In what way does this issue or event directly affect us?
If the issue or event doesn’t affect an organization directly, leaders likely have a duty to keep their mouths shut.
If the issue or event affects an organization directly, then, to the extent necessary, leaders should speak to that part of the issue of event that affects their organizations directly. In many cases, the statement will affect only employees, in which case, the statement should be internal.
Does we have something especially valuable to contribute?
There may be situations where the organization is not directly affected, but has something especially valuable to contribute. Imagine a bridge-engineering firm making a statement in the aftermath of a bridge collapse.
Here again, the organization needs to stick to the area in which its contribution adds real value to public understanding or discussion.
In issuing a statement, what precedent will we be setting?
Finally, leaders need to consider what expectations a statement will create with respect to future issues and events.
This area can be a minefield.
For a concrete example, in the aftermath of the death of a Black American in police custody, a Harvard club gave money to an organization dedicated to Black civil rights. This donation was outside the club’s mission.
A month later, an Asian American was beaten in public, and the Asian members of the club demanded an equal donation be made to an Asian civil-rights group. Only then did the club realize that making donations to all groups that might come forward over time would bankrupt the club.
When the club balked at the second donation, it was accused of anti-Asian racism.
Downshifting: The Non-Statement Statement
For many companies, acting in accordance with the above questions will mean downshifting to fewer and shorter communications.
Public and stakeholder expectations will therefore have to be reset.
In such case, organizations need to master the non-statement statement, which recognizes the issue/event, its importance to a wide circle of people, the firm’s support of robust debate and action by those best positioned to take part.
For an example, readers can look again at the section of this column that begins with the header, “Sticking to Business….”
Contributing vs. Virtue Signaling
Bills for virtue signaling are coming due. Maybe it’s just as well. Organizations that didn’t play won’t pay. Those that don’t want to pay should stop playing.
But organizations can and should contribute. Here, they have to ensure they have a direct interest or something especially valuable to add, and are comfortable with the precedent being set.
#therightwaytowin
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