‘Broadly Pernicious’: Experts Go Head-To-Head On Whether Companies Should Take Political Stances In DCNF Debate

‘Broadly Pernicious’: Experts Go Head-To-Head On Whether Companies Should Take Political Stances In DCNF Debate

Laurel Duggan on March 25, 2022

• Scott Baradell, the owner and founder of Idea Grove and Jim Copland, director of Legal Policy at the Manhattan Institute, debated Thursday on whether companies should take public stances on political issues in Dallas, Texas, at Southern Methodist University.
• Baradell saw major corporations’ political stances as something corporate leaders were pushed into by consumer demands, and thought antitrust regulation could help mitigate the problems associated with powerful companies wading into politics, particularly Big Tech firms. 
• Copland argued that Environmental, Social and Governance (ESG) initiatives did little to solve social and environmental problems, and had a chilling effect in the workplace. 

Scott Baradell, the owner and founder of Idea Grove and Jim Copland, director of Legal Policy at the Manhattan Institute, discussed whether companies should take political stands at a debate hosted by the Daily Caller News Foundation Thursday.

Baradell, who helps companies create public brands, said corporations taking political stands is becoming the norm as they shift to “stakeholder capitalism,” meaning that employees and investors often drive the direction of businesses versus shareholders.

He explained that politics is a minefield that executives are reluctantly navigating through despite their general preference for avoiding controversy.

Baradell argued that younger Americans want brands to get involved because they feel more empowered as consumers — who can boycott or support businesses according to their values — rather than voting in the American political system. He attributed this feeling to both distrust in our government and gridlock making real change difficult to achieve in the political space.

Chris Bedford, senior editor at The Federalist and moderator of the DCNF debate, asked the panelists to discuss the merits and shortfalls of the Environmental, Social and Governance (ESG) movement, which is an investment strategy that accounts for environmental, social and governance concerns.

Copland said corporate political involvement, particularly in the form of ESG initiatives, are “broadly pernicious.” He argued that gridlock is a positive feature of the American system that forces politicians to find consensus through compromises, meaning that change happens gradually, whereas those controls do not apply to corporate governance.

Governance of a corporation, he explained, is very different from environmental and social issues, and ESG initiatives generally fail at achieving environmental goals and could even worsen environmental outcomes, citing various studies.

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Corporations’ political stands, he explained, play a role in creating hostile corporate environments in which workers get fired for holding controversial beliefs.

“A lot of what we see today is employee driven. It’s in particular industries that have concentrated groups of employees with particularized interests,” Copland argued, referencing employee-led efforts to get certain content removed at companies like Netflix and Amazon.

“You’ve got to have an enormous audience or you can get squashed by these forces,” he said, referring to Amazon’s decision to keep Abigail Shrier’s book on transgenderism from its platform while removing other books that criticized gender ideology. “If I worked at a regular corporation I would be terrified of this sort of situation.”

Bedford then brought the conversation to the financial impact of companies’ political statements.

“The old mantra of ‘go woke, go broke,’ at least as far as consumers go, does not seem to hold water anymore,” Bedford said. “What downsides do most of these companies face, at least on the retail side from this, if any?”

Baradell said public-facing statements about politics, such as Nike’s decision to use Colin Kaepernick in advertising, are about maximizing profits and are generally made based on market research with the understanding that, while some customers may boycott, many will continue buying their products and even enjoy the messaging.

“You don’t think Nike knew exactly what was going to happen when it aligned with Colin Kaepernick?” Baradell asked. “It did its research. If the research came back and said ‘everyone’s going to burn their shoes,’ they wouldn’t align with Colin Kaepernick. [The research] said ‘this small group will burn their shoes, this other group will buy more shoes, this group is bigger than this group for Nike therefore this is the direction we go.’”

“When you get big enough you’ve got enough leeway to have opinions that don’t really hurt your brand,” he explained.

Copland agreed that consumer boycotts are mostly ineffective.

The two briefly discussed Big Tech, agreeing that tech companies have gotten too large and powerful. Baradell said antitrust was the answer and recommended reversing some acquisitions in the tech industry, such as Facebook purchasing Instagram. Copland discussed restructuring the way that liability is determined online.