It Can Happen Here

It can happen here

“A country that tolerates evil means- evil manners, standards of ethics-for ageneration, will be so poisoned that it never will have any good end.”― Sinclair Lewis, It Can’t Happen Here

I am a child of “The Great Society,” President Lyndon Johnson’s call to use the country’s post–World War II prosperity to “enrich and elevate our national life.” With an overwhelming majority in Congress, he was able to sign into law 84 pieces of legislation, including the Civil Rights Act of 1964, the antipoverty Economic Opportunity Act of 1964, the Food Stamp Act, the establishment of Head Start, and The Higher Education Act of 1965, which, among other things, provided low-interest loans to students. It was quite the time.I am also a student of the Milton Freidman approach that “The social responsibility of business is to increase its profits.”So here we are, on the horns of a dilemma. What, we wonder, do we want our corporations to be? Purveyors of products and services, providing shareholder value or weighing in on political positions and exercising a broad level of environmental, social, labor and other responsibilities that ultimately define us? We are what we stand for.There are two great truths we have learned about the politicization of all things over the past few years. First, that divisive politics, which have shaken this country to its roots, have now spread to the boardroom; and second, that no company is immune. Neither silence nor leadership guarantees that you will successfully manage the arduous path of the newly bellowing “Roaring 2020s”Companies that seemed immune to activists and political criticism are finding themselves in challenging territory—AT&T, Delta, Disney, McDonald’s and Nike, to name but a few. About the only thing we know for certain is that inconsistency and being too slow to respond to the moment are recipes for desperately unwanted attention and worse.In this space, we have written extensively aboutrules and recommendations for companies, both public and private, and how they can bestnavigate the new normal. While there are many other recommendations, at the top of the list are three critical points:

• Use your peacetime wisely. There is no better time thannowto address what is coming next. If you wait until you are in the crosshairs, it is too late. Hope is not a strategy.

• Understandwhyyou are in business. Shareholder value and satisfied customers are a foundation but no longer a purpose.

• Involve multidisciplinary teams that have business, historical, investor relations, social media, legal, branding and other skills. Corporate teams that are siloed, as most are, will assume that each challenge is a nail in search of a hammer. This is a moment for wise,collectivecounsel. Activists deliberately pick targets that reside between silos, where companies are most vulnerable.

Looking for more clarity, this past week onIn House Warrior, the daily podcast I host for theCorporate Counsel Business Journal, I interviewed my old friend Dr. Tony Jacques, author ofCrisis Counsel: Navigating Legal and Communication Conflict, on his latest article, “When Should Corporations Take A Stand On High-Profile Social Issues?”  What should companies do about these issues when shareholders, customers, employees, stakeholders and politicians are often pulling in different directions? Looking at Disney, Levi Strauss, Nike, Ben & Jerry’s, BMW and more, this show is designed to help companies navigate these challenging issues.Tony suggests there are several key rules, including the business relevance of the issue, corporate consistency, carefully selecting your social issues, and the value and risk of saying nothing.Also this past week, to try and gain some historical perspective,on the weekly showReal WashingtononIn House Warrior—which I cohost with former CNN Legal Analyst Michael Zeldin ofThat Said With Michael Zeldin—we interviewed bestselling author David de Jong about his new bookNazi Billionaires: The Dark History of Germany’s Wealthiest Dynasties. As great as companies like Allianz, BMW, Daimler-Benz, Porsche and Volkswagen are, their paths to extraordinary success and those of their dynastic families go right through the Third Reich. In this show and in his book, David explores the families, their arrangements with Nazis—including Adolf Hitler—and how they profited from historic tragedy. Filled with lessons for today’s corporations facing so many challenging issues, David suggests, “Be mindful of history.”There are at least three lessons from his interview:

• Whatever you do, it will eventually become public.

• Your actions today will be viewed through the lens of history.

• If you stick with the Milton Freidman approach, while you will not be immune to criticism or history, it is at least a safe place to start your internal conversations.

Also this week, Jeff Berkowitz of business intelligence firm Delve authored a very thoughtfulpiecefor companies about theRoe v. Wadedilemma, which is making the issue of corporate positions on social issues all the more prescient.There are so many variables for each company that the best strategy involves recalling the lesson of theZen master and the little boy, as articulated inCharlie Wilson’s War: “We’ll see.” Every company, every situation, every jurisdiction, every moment in time is different and requires baking a fresh cake. With so much at stake, give your company plenty of time—and multiple perspectives —to game out these decisions.This is not the first nor the last time we will be writing on these challenging and evolving issues. As for specific advice, “We’ll see.”

“There are those timid souls who say this battle cannot be won; that we are condemned to a soulless wealth. I do not agree. We have the power to shape the civilization that we want. But we need your will, your labor, your hearts, if we are to build that kind of society.”

― President Lyndon Baines Johnson, May 22, 1964,in his graduation address at the University of Michigan

Enjoy the shows.Richard LevickListen to When Should Corporations Take a Stand on High-Profile Social IssuesListen to Nazi Billionaires: The Dark History of Germany’s Wealthiest Dynasties