Red Corporation Blue Corporation? Corporate political speech becomes a board issue.

AuthorHall, April
PositionRED CORP, BLUE CORP?

After the January 6 attack on the U.S. Capitol, many companies announced that they would halt political contributions, either permanently or for a defined period. Some discontinuations involved a particular political party, some individual legislators and some were complete stops on all contributions.

In the age of "cancel culture," when social media can circulate calls for boycotts to millions of people in minutes, some companies have begun to act quickly, with either their words or their wallets, to distance themselves from political controversy But there are other companies that have leaned in to a variety of public political positions. This raises the question: Are some companies becoming recognized as "blue" (Democrat-supporting) or "red" (Republican-supporting), or even "purple"? And are such associations good for a company, its shareholders and its stakeholders?

In March, for example, Coca-Cola and Delta Air Lines lobbied Georgia legislators and released statements against the state's Republican-backed voting law.

"Corporations will invite serious consequences if they become a vehicle for far-left mobs to hijack our country from outside the constitutional order," said Sen. Mitch McConnell, R-Ky. "Businesses must not use economic blackmail to spread disinformation and push bad ideas that citizens reject at the ballot box."

A spokesperson from Delta declined to comment on McConnell's statements and referred to CEO Ed Bastian's statement against the legislation.

Most board members and governance experts advise against overt political stances for their companies. As Capri Holdings Limited, board member and former secretary of labor, Ann Korologos says, corporations should not be dividing the country any more than it already is.

"Companies having a political identity is not a good idea," she says. "Corporate America is set to a different standard than Congress. There is no political persuasion. Corporations have neutral territory to protect, which is the larger community and its stakeholders."

Crisis communications consultant Davia Temin says she often encourages her client companies to take apolitical stands.

During political or social upheaval, sometimes "corporations have to become the adults in the room, "Temin says. Corporations need to maintain some neutrality, "but it's the difference between making sure that as a corporation you have a purpose and if you're true to purpose."

However, she doesn't usually advise being outwardly...

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