Not long ago, an organization’s political contributions rarely created a stir. Now that consumers are more deeply engaged with brands on different levels, corporate politics and policies face unprecedented scrutiny.
I recently asked Paul Washington, executive director of The Conference Board ESG (Environmental, Social and Governance) Center, what this means for marketers.
Paul Talbot: As companies face what the Conference Board refers to as ‘ever-greater scrutiny of their political activities, what should be on the minds of CMOs and marketing leaders?
Paul Washington: Marketing executives should consider three key factors:
1. The risks to your firm’s reputation and brands can come from multiple directions and sources. It’s easy to anticipate that customers or business partners who disagree with the company’s political or policy views may object or even boycott your products. But you can also face significant blowback for failing to take a stand, or for doing so inadequately or inauthentically.
2. When it comes to political activity, no brand is an island. The policy stance taken by a parent company can affect all of your brands, as can the stance taken by a sister brand. If you don’t centralize all decision-making on political activity at corporate headquarters, at a minimum there needs to be very close coordination across businesses and brands.
3. Your brand can be a powerful asset in lending support to a political issue. But you need to be careful about making sure your own house is in order before taking a leadership role.
Talbot: Is it necessary for the CMO to be kept updated on the organization’s political activity?
Washington: Absolutely. CMOs should not just be updated but engaged throughout the process.
Word about a company’s lobbying or political contributions can get out and spread like wildfire through traditional and social media.
In making decisions about political activity, companies should consider how it advances the company’s business goals, whether it aligns with the company’s values, how different stakeholders will view it, and what impact it will have. A CMO is in an ideal position to help with each part of that evaluation – and especially how consumers may view the company’s action.
Talbot: When organizations study and assess their markets, segments and their customers, how should they gauge and respond to the growing political polarization they may find?
Washington: I would take it into consideration, but I wouldn’t overreact or become paralyzed by it. Our research has shown that taking a stand on issues can have an overall positive effect. People appreciate a company with principles. Having said that, how you position your stance matters.
The Conference Board has advised its members to have ‘a clear set of standards and guidelines that you can use in making and defending any positions you take.’
Talbot: To what extent, if any, should these intersect with corporate and brand positioning that appears in the organization’s marketing strategy?
Washington: There is a natural overlap here, in that both your corporate political activity and your marketing strategy should be based on your company’s business, identity and values. Otherwise, you’ll come across as inauthentic.
When it comes to having clear guidelines for corporate political activity, you’ll want to be very clear about who makes the decision, who is involved in the decision, and what factors you consider in deciding whether and how to take a stand.
And you’ll want to be transparent about that process, because you’ll inevitably need to defend why you did, or didn’t, take a stand on an issue.
Talbot: Any other thoughts on this new era of political scrutiny that organizations face that marketing leaders would find of interest?
Washington: Companies are in a tricky position right now. On the one hand, they are more trusted than government or media or many other institutions. On the other hand, what has made them more trusted is that they are perceived as more competent and ethical – and less compromised by partisanship and polarization.
There are different strategies for maintaining that essential trust in this environment. One is to disavow lobbying and political activity altogether. But that’s impossible for most firms.
In light of that reality, the key is to make sure that you focus on issues that are truly material to your business, you ground your positions in your company’s interests and values, and that you are able to articulate your positions in a way that is respectful and inclusive. CMOs are ideally suited to help companies achieve all those goals.