Suddenly, Corporate Values Might Come With A High Price
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Suddenly, Corporate Values Might Come With A High Price

Corporate values that may have seemed safe and relatively anodyne a few months ago—tolerance, diversity, inclusion—are suddenly controversial, and potentially expensive.

Paul Holmes

Suddenly, Corporate Values Might Come With A High Price

Twenty-five years ago, Dayton-Hudson—which rebranded itself as Target Corporation in 2000—found itself in hot water because of an $18,000 grant from the Dayton-Hudson Foundation to Planned Parenthood.

Worried about the potential for protests from the religious right, in August of 1990 the Foundation said it would not renew its grant to the organization, incurring the wrath of pro-choice activists. Protests ensued, and eventually the Foundation reinstated the grant—following a guarantee that the money would be used for public education and would not fund abortions.

There were two important lessons to be learned from this incident.

The first lesson was that in the modern world, it is incredibly difficult for companies to avoid political positions. Every charitable donation, every advertising dollar, every policy position is—like it or not—a political statement, with the potential to anger a sub-section of the company’s employee and customer base. And increasingly, customers in particular are willing to let their feelings be known and influence their purchasing decisions.

The second lesson was that companies needed to base their decisions in this arena on core values. That was, ultimately, what Dayton Hudson did in reinstating the grant to Planned Parenthood, but in the intervening weeks there was a suspicion that the company was weighing the commercial impact of the two competing boycotts, trying to figure out whether right or left could inflict more financial damage, or looking for a solution that would make everyone happy.

Those two lessons are particularly relevant today, 25 years on, because the political dialogue—at least in the United States—has become more polarized, because social media have helped boycott threats spread more widely and more rapidly, which together mean that companies may be forced to pay a higher price for choosing sides.

There have already been several examples of corporate comments leading to angry boycott threats, after Pepsi CEO Indra Nooyi told an interviewer of employee concerns: “The question that they are asking, especially those who are not white: 'Are we safe?' Women are asking, 'Are we safe?' LGBT people are asking, 'Are we safe?'; or after New Balance public affairs chief Matthew LeBretton told The Wall Street Journal that the with Trump’s victory “we feel things are going to move in the right direction”—a pronouncement that led white supremacist groups to adopt the sneakers as “the official shoes of white people.”  

Both of those companies ended up either backtracking, or at least providing more context for the offending remarks. But this week saw an outpouring of fury directed toward Kellogg’s announced that it would no longer be advertising on the far-right “news” site Breitbart News, whose former chairman Steve Bannon is a senior aide to the president-elect.

Kellogg’s explanation for its decision was clear: ““We regularly work with our media-buying partners to ensure our ads do not appear on sites that are not aligned with our values as a company,” said Kris Charles, a spokeswoman for the company. “We recently reviewed the list of sites where our ads can be placed and decided to discontinue advertising on Breitbart.com. We are working to remove our ads from that site.”

There’s no question that Breitbart is spectacularly unaligned with Kellogg’s values. The “Our Values” section of the company’s website says it will “show respect for and value all individuals for their diverse backgrounds, experiences, styles, approaches and ideas.” Its global code of ethics states, “We are committed to maintaining a work environment in which our people are treated with dignity and respect and which is free of harassment and discrimination.”

Breitbart headlines have claimed that “Birth Control Makes Women Unattractive and Crazy,” described Republican intellectual Bill Kristol as a “Renegade Jew,” described a same sex couple fighting for non-discrimination as “Lesbian Bridezillas,” and advised female victims of online harassment that the solution is simple: “Log Off.”

So we should not be surprised then that the site’s response to Kellogg’s decision was to “declare war.”

"For Kellogg's, an American brand, to blacklist Breitbart News in order to placate left-wing totalitarians is a disgraceful act of cowardice," the site said in a statement. "They insult our incredibly diverse staff and spit in the face of our 45,000,000 highly engaged, highly perceptive, highly loyal readers, many of whom are Kellogg's customers." It added that the decision was “an act of ideological warfare” against conservative readers whose "values propelled Donald Trump into the White House."

The hashtag #DumpKellogg quickly trended, and the news site claims its petition attracted 250,000 signatures in two days.

It should be clear from this that values that may have seemed safe and relatively anodyne a few months ago—tolerance, diversity, inclusion—are suddenly controversial, and potentially expensive. At the very least, the forces of intolerance feel empowered by the Trump campaign’s embrace of misogyny, anti-gay bigotry and white supremacist ideology. At worst, it seems likely that the incoming administration will craft policies deliberately targeting minority populations.

It also reasonable for companies to question whether President Trump’s approach to business conflict might be fundamentally different from anything we have seen before.

Most companies don’t particularly like regulation, but at least regulation applies to everyone equally. In the past week, Trump has signaled a willingness to eschew regulation—and formal policymaking—and rely instead on what former US Treasury Secretary Lawrence Summers calls “ad hoc or deals-based capitalism.”

Says Summers, “The President-elect of the United States decided in a purely ad hoc basis that he wanted Carrier to remain in Indiana…. It seems to me what we have just witnessed is an act of ad hoc deal capitalism and worse yet its celebration as a model…. A principle is being established: it is good for the President to try to figure out what people want and lean on companies to give it to them. Predictability and procedure are less important than getting the right result at the right time.”

And if Trump is willing to exercise that power to save a few hundred jobs (in an economy in which, as Paul Krugman points out, 75,000 workers lose their jobs every day), why would he not employ it to intimidate companies that support women’s rights, advocate for equal treatment for gays and lesbians, or refuse to advertise on far-right websites?

In the Obama era, it took relatively little courage or resolve for companies to live their values. In the coming years, those same companies are going to have to decide how deep their commitment to fairness and integrity really is, and what price they are prepared to pay to espouse those values in a world where refusing to embrace hate and bigotry is seen as an act of war.

Companies that choose to make a stand should be applauded and supported more than ever.

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