We aren’t normally in the practice of saying this, but in the case of voters sticking it to woke CEOs we most definitely told you so.
For the past several years, corporations and their leaders have steadily been forcing themselves leftward in an effort to placate the vocal progressive minority that runs Twitter. Then, last year, this capitulation to the woke mob reached a fever pitch with the rise of critical race theory (CRT).
In some instances, CEOs have done this probably because they’re afraid. After all, how many times have we seen those condemned by the social justice crowd get shunned by business partners or sponsors in an effort to distance themselves lest they too get branded as “not woke”? In other cases, CEOs genuinely believe their own political speech.
Either way, a pattern has emerged where corporate America tells the woke what they want to hear in hopes that it will appease them and increase company profits. But if these CEOs thought coddling and enabling this liberal psychosis would benefit their bottom line, they are sadly mistaken.
According to a new report from Brunswick Insights, corporate executives are “2-to-1 ‘out of step’ with broader public sentiment related to engagement on social issues.” Specifically, “only a minority of voters (36%) agree unequivocally that companies should speak out on social issues, compared to 63% of corporate executives.” The report notes that CEOs “vastly overestimate” how much their woke virtue-signaling matters to the average American, as only 39% of voters believe making statements on social issues is effective for executives.
In other words, regular Americans are not buying what woke CEOs are selling. And now these same CEOs endanger their own bottom line by continuing to pretend the majority of consumers want in on that kind of pandering.
As veterans of the investment business, we have long believed this sort of behavior only hurts a company’s bottom line and that of its investors. Political speech by CEOs detracts from shareholder value. It’s what led us to establish our own fund, American Conservative Values ETF, last year. Our guiding principle has been that politics belongs on the campaign trail, not in the boardroom. As such we’ve boycotted numerous corporations on behalf of our clients that enjoy walking in lockstep to the tune of liberal political speech like Google, Facebook, Starbucks, American Express, Coca-Cola, and Amazon to name a few.
What these companies and their leaders fail to understand is that the bulk of Americans are tired of everything in their daily lives being politicized. That much is clear from the Brunswick study. If they weren’t, the numbers would instead show an overwhelming majority approves whenever a CEO decides to make a political declaration. Instead, the opposite is true: the report demonstrates in no uncertain terms that a CEO who continues to force their company into politics is placing their own political agenda ahead of maximizing shareholder value.
That might satisfy the activist class that spends most of its time on Twitter, but those people only make up a relatively small, if loud, portion of the American public.
CEOs worth their weight should know that a company’s employees and customers are diverse and eclectic. Employees and clients come from a variety of backgrounds with a variety of opinions, and groveling to one group inevitably alienates the rest of them. Alienate enough workers, shareholders, and consumers, and they eventually decide to move on. Before you know it, there are suddenly not enough employees to do the work or enough shareholders. And when that happens, how long is it before you suddenly find yourself CEO of a dead company?
When Americans vote for a political candidate, it’s very much like a financial investment. Voters make a choice at the ballot box in the hope that their decision will yield profitable returns. But if the elected official doesn’t deliver and falls short of that maximum return, voters will hold them accountable.
It’s no different than boycotting a company that puts social justice pandering ahead of maximizing the interests of shareholders. And business leaders should remember that before they choose to continue putting ideology first and their customers second.
Bill Flaig and Tom Carter are the founders of American Conservative Values ETF.