Companies Are Expected To Take Positions On Social Issues Today. Here’s How To Prepare

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The need to consider taking a public stance on fast-moving, sensitive topics raises complex implications for leadership teams and boards.

A decade ago, no one expected an entertainment company to have a public view on LGBTQ+ rights, or a technology company to articulate its stance on abortion. Today, the culture of viral “stakeholder capitalism” is challenging organizations to consider potential positions on complex and nuanced social issues the moment they arise, often with significant potential risks to the company’s brand and shareholder value. As a result, company leaders and boards must think differently about the role of communications regarding social issues.

A range of forces have created this environment. Customers, employees and communities all have a greater awareness of social issues—and higher expectations of business leaders. Ever-accelerating news cycles and broader social media impact mean that companies must consider issues and determine actions quickly. Every possible decision, including the decision to stay silent, has implications. Internal communications are becoming public more often. Increased polarization means that there is often not a safe middle ground, putting companies in the difficult position of potentially alienating a meaningful segment of their customer base.

Many companies are starting to become more proactive in determining their positions and possible actions surrounding complex social issues. Yet the underlying leadership implications of this environment are even more profound and demanding. Company leaders should think about these implications in four critical areas.

1. Elevate communications on the leadership agenda. Communications will demand more energy, focus, planning and preparation than ever before, in terms of both leadership commitment and board oversight. Companies are likely to rethink the organizational structure needed to support this shift. That includes potentially realigning responsibilities among senior roles that touch on communications—the CCO and the heads of public affairs, investor relations, government affairs and marketing—to determine who ultimately facilitates the company’s internal process and response to social issues and how decision rights align.

In some instances, organizations are even creating new “issues management” functions. These units are tasked with looking ahead to determine which issues are likely to emerge in the near, medium and long term, so that companies can think through the ramifications of a given viewpoint before the issue takes over the headlines. In those cases, leaders are being recruited to oversee this function: head of issues management.

2. Rethink the role of the CCO. In addition to their traditional communications role, CCOs now require a much broader set of skills than in the past. Internally, the CCO often acts as a chief convening officer among the leadership team, bringing together counterparts in the human resources, diversity and inclusion, and legal functions — and collectively reporting to the CEO. Externally, CCOs must understand the needs of a broader set of stakeholder groups, including customers, shareholders, government regulators and communities in which the company operates, among others.

In addition, CCOs increasingly require some of the capabilities of a world-class marketing leader: data analysis, segmentation, social listening and monitoring, use of influencers and targeting, while understanding how any program will affect shareholders.

Given this expanded mandate, the new generation of CCOs will more consistently move beyond coaching other executives and develop an enhanced executive presence themselves.

3. Build the capabilities of all senior leaders. Beyond the C-Suite, leaders at many levels may be called upon to respond to divisive social issues that impact employees, customers and other stakeholders. For example, the division leader who runs a billion-dollar business within a large corporation can no longer count on past unwritten protocols on which communications issues will be handled at the corporate or business unit levels.

For this reason, leaders across and beyond the C-Suite will need stronger capabilities in specific areas such as strategic acumen and communication. Not only must they bring strong conceptual thinking, but also the elements of character that will enable nuanced stakeholder understanding, such as empathy. Organizations hiring for key leadership roles will need to consider the skill set of candidates more closely than ever.

In addition, boards will need to factor in this broader set of leadership characteristics into succession planning, particularly for the CEO role. CEOs must demonstrate authenticity, empathy and confidence in sensitive interactions with employees, the general public and other stakeholders. Any lapses in empathy and authenticity in a CEO’s communications will be called out.

4. Increase board-level oversight. In the past, boards largely treated communications as a management responsibility. Today, given the potential brand and reputational risk of being caught wrong-footed on a particular issue—along with potential destruction of shareholder value—boards must integrate communication regarding social issues into their risk-management frameworks and oversight processes.

Specifically, boards are likely to want more clarity and transparency from management about the processes and structures in place to address social issues. Boards will want to hear directly from the CEO on the topic, and some may opt to bring the CCO in to hear firsthand about the plans for addressing major social issues, key audiences, use of various media platforms and other aspects of the company’s response. Boards may also want to see an “issues map” of the hot button issues likely to emerge in the near future and the company’s position on them.

The current environment poses many unknowns, but one thing is certain: The next societal issue will inevitably emerge—likely soon—and when it does, companies will have little time to reflect. For that reason, the time to reflect is now. If CEOs, CCOs, extended leadership teams and boards can develop some of the leadership capabilities and plans we have discussed here, they will be better prepared to respond when the next issue arises.

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