Which issues should organisations take a stand on? This has become a significant question for organisations and their leadership teams, and getting it right is not easy. Make a statement on a current issue and while you may secure the support of some of your stakeholders, you risk alienating others. On the other hand, electing to stay silent may also not be acceptable or appropriate.
Organisations are used to being the target of activist attacks. The tactics employed by activists have in recent years become more radical and disruptive. From pink paint being splattered over the Department of Transport building in London by protesters campaigning against a high-speed rail project, to Greenpeace bolting down a capsule containing campaigners outside the front door of BP’s London headquarters, organisations have had to adapt to high profile campaigning stunts designed to secure headlines and inflict maximum reputational damage.
More recently, however, a much more difficult and nuanced debate has kicked off within organisations about the extent to which they themselves should become activists. One driver of this is the re-emergence of the debate around purpose. As boards of directors debate the role of the organisation, it is natural that they should also consider what the organisation should stand for and against. A second driver are the ESG commitments that organisations choose to make in support of their purpose. This applies not just to organisations who can choose where to deploy their human and financial capital to activate for change in supply chain sourcing or employee rights, but also to investors who are becoming increasingly activist in agitating for broader organisational change.
So how can organisations and their leaders decide between passive and active strategies? How can they best identify and select the issues that matter most to them? And what sort of legitimacy should they have to demonstrate before they are given an audience? These are not easy questions to answer, and various different stakeholder groups may well choose to answer them in different ways.
In this blog, I put forward three suggestions for how organisations and their leaders should approach activist activity. Each suggestion opens up areas for further research.
#1 Clearly link your activism with your purpose
Purpose is back. Boards are under pressure from multiple different stakeholders – including investors – to articulate their purpose. This has in part been driven by the growing discourse around stakeholder capitalism, an increased focus on the wider responsibilities of business in society, the rise in ESG investing, and hyper vigilance from societal pressure groups and the media.
If purpose is to be meaningful, it needs to drive strategic choices. A meaningful purpose can act as a valuable ‘north star’, helping boards decide between different options when it comes to the deployment of its finite financial and human capital. Investors in particular are focused on this aspect of purpose, increasingly asking boards to explain how purpose helps them to decide between different investment options open to them at any given time. Purpose also acts as ‘guard rails’, providing clarity for all stakeholders on the choices or strategies that are not core to the activity of the organisation. Purpose, in these constructs, helps boards make choices and prevents boards from pursuing profit in areas where there is little real organisational competence.
This opens up a series of further questions. Are boards diverse enough to represent the views of the wider stakeholders they seek to represent? Do boards receive the information they required to make independent assessments of opportunities, or are they overly reliant on prepared papers from the executive? Are boards able to focus on the unknown, the risks and opportunities that will prove the greatest challenges over the medium term? And how should Boards choose between the (often competing) interests of different stakeholder groups when articulating purpose and mission?
#2 Build coalitions, not competitions
Purpose does not need to be anchored in achieving competitive advantage. By way of example, many organisations could certainly have as their stated purpose the improvement of human health and/or enabling healthy living. Purpose reflects why an organisation exists. By contrast, mission reflects how it chooses to pursue its purpose through its various strategies. Mission (or strategy) is therefore more usually focused on achieving some form of competitive advantage.
Purpose-led organisations can achieve significant progress through partnership, coalition and the building of productive eco-systems that often include their competitors. Organisations that achieve maximum impact from their activist agendas are often those who see beyond the immediacy of competitive advantage. We can see evidence of this across many sectors – from the garment industry collaborating on factory safety post Rana Plaza to FMCG companies working collaboratively on palm oil collaborations within the supply chain. And it is through these wider coalitions that organisations can achieve some form of wider legitimacy when it comes to their activism. When competitors come together to stand for systemic change, it diminishes the power of charges of self-interest.
As with the first suggestion, this too opens up further questions. How can organisations build coalitions on anything other than the most basic of issues? Is it right that the larger, more resource rich organisations, be given the legitimacy to act as a leading group for change? How can smaller, less connected, voices be heard? And how can policy makers avoid ‘regulatory capture’ from these powerful coalitions of leading organisations? Within the coalitions, too, there arise significant questions. Who gets to drive the agenda(s)? How can these coalitions be made more representative (geographically)? What types of voices within each organisation gets to participate?
#3 Be consistent and persistent
Third, activism can take many forms. Activist campaigns can be immediate and limited in scope or objective. Such campaigns may be to overturn a policy proposal currently under discussion, or to address some form of imbalance when it comes to diversity and representation. Or they can be much longer term in nature, addressing structural changes in the supply chain or climate commitments. Organisations can receive positive social evaluations from both types of activism. In the short term, immediate activism to overturn a policy proposal that would have harmed society can of course be positioned positively for the organisations concerned. But most organisational activism tends to address longer term issues – in particular now climate responsibility and diversity and inclusion. These are not issues that can be resolved in a single moment. Often, they require major systems and/or cultural change, and this requires consistency and persistence.
This may seem easy to deliver, but it is not. First, new management teams often come into their roles articulating new strategic priorities. This makes it difficult for organisations to tackle longer term issues with the consistency and persistence that is required. Second, the needle of public opinion shifts. New priorities emerge that society gets behind as important, and the pressure is there on organisations to respond. This creates short-term thinking and again undermines multi-year strategies and commitments. But despite this, it is possible for longer term issues to be addressed, such as reductions in carbon footprints which continues to be an issue that unites organisations and their stakeholders.
As with the previous two suggestions, this too brings a further set of questions. Who gets to decide on which issues to target? How can boards make informed decisions, and how can progress best be measured? Should organisations attempt to put in place longer term commitments that bind future managers, and if so, how could this be done? Are there any absolute responsibilities for organisations and their leaders?
This blog attempts to set out three approaches for organisations looking to maximise the impact – and the positive social evaluations that may follow – from organisational activism. It then opens up further questions that flow from these, in the hope that these will provoke responses and contributions.
Rupert Younger is Director of the Oxford University Centre for Corporate Reputation and a member of the Senior Common Rooms at Worcester College Oxford and St Antony’s College Oxford. He is also Chairman of Exton Park Vineyard, and a Trustee and Chair of the Governance & Nominations Committee at the international humanitarian de-mining charity The HALO Trust