The volatile fumes were building up for months. Formerly freewheeling tech companies Facebook, Google and Pinterest had all clamped down on employee speech in response to a rise in social activism. But the match was lit late last month, when Brian Armstrong, CEO of the cryptocurrency platform Coinbase, issued a proclamation that his company would be a politics-free zone: no political debate in the office, and no social activism on the company’s part. Coinbase would focus instead on its core mission. If workers weren’t comfortable with that, they could take severance packages. At least 60 of them did, about 5% of the workforce. In a follow-up memo, Armstrong said he was fine with that: “I think it will result in us having a stronger and more united team.”
In making such a black-and-white declaration, Armstrong kicked off a pitched debate among business leaders and workers struggling to navigate an increasingly difficult grey zone in a polarized America. Some Silicon Valley investors and executives welcomed the Coinbase CEO’s statement, which came after a season of employee activism, including a walkout at Coinbase. “Enough is enough. The pendulum swings and it swings back,” tech investor Cyan Bannister told the Washington Post. “Sometimes people just want to have a safe place to go where they don’t have to think about this stuff anymore because it’s literally everywhere.” Former Twitter CEO Dick Costolo took the opposite stance, pointing out that Silicon Valley’s culture used to “welcome lively debate about ideas and society,” he tweeted, condemning the clampdown. “This isn’t great leadership. It’s the abdication of leadership. It’s the equivalent of telling your employees to ‘shut up and dribble.’
Which position will prevail? As an indicator, the backlash against social activism probably shows which way we’re headed: forward. Corporate America can’t turn back the clock on diversity, whether that applies to people or opinions. And America’s multiple crises–pandemic, economic and social–have cast a bright light on inequities that can’t be ignored. Here are some of the different ways that’s taking hold:
Listening to Stakeholders
“Companies have stepped up on a number of issues in recent years, particularly on topics that affect their employees and customers–gun safety, marriage equality, access to reproductive healthcare and immigration policy,” corporate-responsibility expert Susan McPherson, founder and CEO of McPherson Strategies, told From Day One. Ignoring those issues doesn’t cut it anymore, especially in a time of upheaval. “While companies have historically leaned heavily out of talking politics, the fact is that politics is unavoidable this year, and impossible to separate ourselves from entirely. It would be a mistake for leaders not to prepare for and lean into the conversation,” according to Sarah Sheehan, president and founder of Bravely, an employee-coaching firm.
Focusing on Fixing Society
Only days after the Coinbase commotion, JPMorgan Chase, the largest U.S. banking company (2019 assets: $2.7 trillion), took a leap in the other direction. The bank said it would commit $30 billion over the next five years to address racial inequity though loans and other programs. Chase is not alone–giant businesses including Microsoft and Kaiser Permanente have made similar commitments to affordable housing and other issues. What prompted such a focused effort on JPMorgan’s part? “The murder of George Floyd was a sea change, I think, in the attitude of Americans and people about the injustice that has taken place here,” said CEO Jamie Dimon at the LBJ School of Public Affairs 50th Anniversary Forum.
The failure until now to address the problem, Dimon said in an interview with journalist Pattie Sellers, is symptomatic of America’s inability to come to a consensus on how to fix things, from health care to public education to infrastructure. “We have failed as a nation. We’re no longer good at public policy. Our incompetence has become a little bit of a joke around the world … We can’t keep up,” he said. “Public policy takes analysis, details, understanding. To me, this is the single most important thing that Americans have got to do in the next 20 years.”
Corporate leaders can figure out how to deal with either four more years of President Trump or a President Biden, but the prospect of a contested election and a loss of confidence in election integrity is bad for business. Michael Porter of Harvard Business School says there is “an essential role for business in addressing political dysfunction,” citing data showing that political gridlock is causing “a disastrous decline” in U.S. competitiveness, the New York Times reported.
Business leaders have responded swiftly. “What we're seeing this year is an enormous focus on protecting our democracy and promoting civic engagement, from Old Navy's decision to pay employees to be poll workers to the recent Leadership Now Project statement calling for civility and patience ahead of the election,” McPherson wrote in an email to From Day One. “Business leaders understand that the health of our economy depends on the strength of our democracy. With so much at stake this year, every company should do their part to encourage employees to vote (safely!), instill confidence in our elections, and promote patience until every vote is counted.”
Making Promises–But Keeping Them?
Responding to the Black Lives Matter movement, many companies were held accountable for commitments that didn’t reflect their earlier behavior–or seemed unlikely to be fulfilled. They need to tread carefully here. “Social-justice issues are macro illustrations of pretty standard corporate values of integrity, respect and inclusion,” Janine Yancey, founder and CEO of Emtrain, a workplace-culture platform, told From Day One. “Look at most companies' values and codes of conduct and you'll see these values reflected. And employees are watching to see if company leaders are ‘real’ about these values and they actually mean something within the organization. Or conversely, whether they're just inauthentic window dressing for PR, lawyers and regulators.”
Picking Their Battles
While the Coinbase position was at the extreme end of the spectrum, there is probably a point of peril if business leaders forget they have a business to run. “As a founder, I want to build a company that contributes to positive change in the world. And to attract top talent and to understand and serve a wide customer base, a business can’t simply ignore all the social issues employees and customers are reckoning with,” wrote Jessica Lessin, founder of the tech website The Information. “Still, I don’t think a company should be forced to be on the front lines of every major social issue. Leaders have to strike a balance, define a culture and stick with it.”
How to approach that challenge? “While it is not necessary for corporations to take a stand and invest in every social issue, employees and consumers are no longer willing to accept companies who haven’t taken a stand at all,” Melanie Newell, SVP of Rocket Social Impact, told From Day One. “Companies must dig deep to understand what is currently most important to their stakeholders and in alignment with their brand values to determine where to invest their time, resources and dollars. Determine your priorities, define how to invest in them and share that plan.”
Editor’s note: Bravely, Emtrain and Rocket Social Impact have been sponsors or partners of From Day One.
Steve Koepp is a co-founder of From Day One. Previously, he was editorial director of Time Inc. Books, executive editor of Fortune and deputy managing editor of Time