America’s CEOs tripped over each other this week as they raced towards the White House Manufacturing Advisory Council exits. Membership unraveled so quickly that Trump tweeted out the termination of the group, and his Strategy and Policy Forum, to spare himself and the members any further embarrassment. Of course, just hours earlier, he tweeted that the “grandstanders” who left should have never accepted their appointments in the first place.
The only sensible interpretation of Trump’s tweetstorm was that the vanishing CEOs should have known from the outset that the president’s positions on various issues would be so outrageous that their resignations would be inevitable. As a former public company chairman and CEO, though, that kind of omniscience struck me as an unreasonable expectation.
When complex issues require input from experienced leaders and experts, it seems reasonable that public company CEOs should engage in policy development. Let’s set aside for the moment that Trump characterized others as grandstanders. (It is simply too exhausting to explore the irony.) Their resignations did spark some thought, though, about the protocol of political expression afforded to the shepherds of companies that others own. Some would argue that public companies and their CEOs should remain apolitical, but those voices choke on simple questions: Should CEO’s abandon lobbying efforts, or is political expression in perceived self-interest acceptable? And should perceived self-interest overwhelm all other considerations, including public health and safety? Examples might include the auto industry’s opposition to seat belts and fleet mileage regulations, or the tobacco consortium’s obfuscation of the link between smoking and cancer. Few members of the public, meanwhile, questioned the right of public company executives to involve themselves in the politically charged debate over public healthcare.
When complex issues require input from experienced leaders and experts, it seems reasonable that public company CEOs should engage in policy development. Immigration policy, the nation’s approach to health care, minimum wage targets, H-1B visas for highly skilled employees, and ensuring equality in the workplace are all examples in which public company CEOs should have a seat at the table, in an attempt to serve the national community. If you manage 500 people in a technology community, chances are your experience informs your opinion on livable wages, the need for engineers who received degrees in the US but who do not have US citizenship, the challenges of establishing competitive US manufacturing, and the expense and inefficiencies of our health care system.
CEOs bring valuable perspective to the dialogue over these crucial issues. For example, when former Illinois governor Pat Quinn convened a group to examine broadband deployment in the state, he requested that technology company CEOs join as commissioners. At that time, I served as chairman and CEO of a publicly-held company that specialized in networking antennas and wireless test and measurement. The company’s experience with business and public safety networks qualified us to contribute to this worthwhile commission.
So, if we generally agree that it is not political—or at least not unacceptably so—for CEOs to serve on government councils or commissions is it political to resign from such councils?
Case in point: In a LinkedIn post, I had suggested public company boards would not tolerate Trump’s behavior. If a CEO angrily tweeted each time he disagreed with an unflattering review by an analyst, or publicly attacked a competitor, or gave performance reviews to subordinates over social media, the board of directors would dismiss that CEO. After my post, one CEO wrote to me saying that to publicly express concern about Trump’s leadership style or specific positions might damage relationships with a few key customers. He made his case even though I claimed no affiliation with past companies. His view was certainly extreme. All Americans, even those who had worked for his company, have the right to express themselves openly and without intimidation.
Others who share his view, however, would certainly feel entitled to criticize those corporate leaders who resigned from Trump’s two active business councils. Is the criticism fair? I don’t think so. Their titles and positions aside, CEO’s and public company executives are human beings. There are some human beings who can rationalize Nazism and white supremacy as opinions on a political spectrum. Other human beings recoil at the drumbeat of the Nazi slogans “Blut und Boden” (Blood and Soil), and “Jews won’t take our place,” and the specter of the police being “outgunned” by militant protesters at a public rally.
As human beings, business leaders have the right to vote with their feet when their president (the titular head of their council) gave succor to the likes of David Duke and Richard Spencer. They had the right to vote with their feet when David Duke tweeted his support for Trump’s words of conciliation:
As for those who claim their resignation might represent pressure from customers or investors, I doubt that Merck’s CEO launched a Survey Monkey, or that the Intel CEO ran a series of focus groups over the weekend. They may have discussed their decision with their respective boards of directors. Aside from being human beings first, they do report to their boards and they are responsible for their corporate work environment. Their resignations said nothing more and nothing less than, “As a human being, these groups are an affront and I cannot countenance ambiguous leadership on the issue of racism. As a CEO, I want my board, my management team, our valued employees, and our customers to know that our company stands against these domestic terrorists and those who would tolerate their actions.”
These CEOs did not resign because of a policy disagreement or refuse to serve because of political affiliation. They refused to serve a leader who abdicated moral leadership with respect to racism. In the end, their own boards can determine if their resignations served the interest of the corporation. Who knows, if their investors and customers prefer executives who countenance racism, those CEOs might be at risk. My guess, though, is that corporate boards will support moral leadership in instances where there are really not two sides—no matter what the president says.
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