Leadership Unscripted: Taking a Stand on Divisive Issues

CEOs and business leaders are increasingly expected to take stands on a range of controversial and politically divisive issues. But leaders risk weakening rather than strengthening their corporate brands if they are not thoughtful in how they respond. As part of the University of Virginia Darden School of Business‘ “Leadership Unscripted” series at UVA Darden DC Metro, Adam Goodman, a veteran media consultant, talked about how to manage this challenge with Darden Professor Kim Whitler, who teaches in the Marketing area.

Goodman, a partner at Ballard Partners, has helped corporations, advocacy groups and political campaigns navigate reputation challenges for more than four decades. His discussion with Whitler, a branding expert and co-author of multiple books on the subject, including the recent Athlete Brands: How to Benefit from Your Name, Image and Likeness, focused on how CEOs and business leaders can deal with controversial issues in ways that strengthen rather than weaken their brands.

Adam Goodman (left) and Kim Whitler

Whitler set the stage for the in-person and online audience up front: “If you want to understand why taking a stand on divisive socio-political positions is good for firms, there are millions of articles available to you. We’re going to venture away from that today,” she said. Instead, the question of the night was, “What is the downside, and risk, to taking a stand?”

“We are in the midst of CEOS and CMOs struggling … they’re trying to make the right decision,” she added.

Goodman emphasized that using caution when taking sides publicly doesn’t mean lack of care or action. “It doesn’t mean you ignore — you don’t ignore. It doesn’t mean you don’t engage — you do engage,” he said. The real question, he said, is not whether to engage with issues, but how. Demonstrating authentic compassion towards individuals impacted by an issue is the important thing.

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Whitler said leaders need to consider how their statements resonate negatively as well as positively. “There are multiple academic studies that now show that there is a negative asymmetric impact on consumers, employees and investors. Those who agree with Twitter’s Musk or Disney’s Chapek, for example, are pleased, but the company performed as expected. There isn’t a significant upside. In contrast, those who disagree have a negative reaction leading to a significant downside. The downside is worse than the upside, and this is showing up as significant firm reputation declines among companies that pick one side over the other.”

“People are looking for authenticity,” Goodman said during the Q & A. “If a CEO portrays and communicates that into a reality where answers are hard to come by, you’re in a good place.”

Though extreme voices are loud, Whitler and Goodman talked about recent data that suggests broad public opinion is cooling on business leaders who weigh in on divisive issues. “I think … we are tired of being at each other’s throats,” said Goodman. “We want something a little bit healthier, more mature. I think CEOs of America who understand that could lead that charge in a big way.”

Listen to the session: