Trump is coming back to the White House, and companies are preparing for a decidedly different tone that will lean away from DEI and globalization towards a more conservative and America First narrative. Already, major companies are examining their role in the public discourse, and it will be interesting to see if the same pressure we observed over the past four years for corporates to respond on social and geopolitical issues will continue to be as intense.
Communicating a general message of equity and respect was and still is a no-brainer for most corporates as these issues will most likely align with their values and is relevant to their employees and customer base.
However, in the last couple of years, the wars in Ukraine and Gaza presented more difficult decisions. A number of company CEOs in the West made public statements expressing support for Ukraine, regardless of their business exposure to the region, which set a precedent.
But then came the Israel-Hamas conflict, and calls for companies to express their support for one side or the other ramped up. The willingness to comment publicly on Ukraine but not comment on Israel-Gaza opened these companies up to even more reputational damage as employees and campaigners called out their hypocrisy.
Under a Trump Administration, the pressure for companies to comment on social issues or be viewed as proxies to geopolitical conflicts will likely come in different form. We saw the announcement of tariffs on Canada, Mexico and China is already pushing companies to weigh in on economic policy. US-based companies with international operations are especially vulnerable to getting caught in the cross-fire. Many are preparing their mitigation plans, and thinking about what your internal and external messages will be needs to be part of the exercise.
As part of their reputation risk mitigation plans, here are 3 questions company executives should ask to inform their response strategy.
Do you know enough about your employees', customers' and shareholders' perception on the issue to appropriately assess how a public statement might be received.
How does the statement align with your company's mission, values and brand position.
3. What are the potential operational, political or revenue impacts of making or not making a statement? Do you have the data to support your assessment?
This is where the reputational risk data gap becomes most acute because often the answer is executives lack the necessary insights to answer these questions.
The lack of data leads to emotional decision making that may miss important nuances on stakeholder reactions, which in turn can lead to greater risk to reputation and business success.
The fact is, our research has found saying nothing could be the right business decision depending on what the data is telling you. This is where a framework for decision making using data tailored to enable a evidence-based discussion about the reputational and operational trade offs is necessary.
It facilitates a pragmatic discussion that can evaluate what is best for the company, its employees, shareholders, and customers. This approach means knee jerk responses become a thing of the past and companies can transition towards making measured and consistent analyses of when and why they will engage or not engage on certain political or social issues because it aligns with their mission, values and is important to their audiences that matter most.
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