They were warned, repeatedly. They saw all the evidence: the thousands of lies, the conspiracy theories, the racial divisiveness, the tendency to encourage violence, nearly three decades of well-documented misogyny, and the political exploitation of a pandemic. But despite all that, Corporate America’s leaders felt they had to do business with Donald Trump. “He is the president of the United States. I believe he is the pilot flying our airplane,” said JPMorgan Chase CEO Jamie Dimon, one of America’s most respected bankers, early in Trump’s tenure. “I would try to help any president of the United States because I’m a patriot.”
The ensuing relationship between Corporate America and President Trump was bumpy at times, most dramatically when Trump declared that there were “very fine people on both sides” during the outbreak of white-nationalist violence in Charlottesville, Va. But for the most part, America’s business leaders went along for the ride. Trump became an ally in lucrative ways, rewarding corporations with major tax cuts and rolled-back regulations.
Now they’re essentially done with him, provoked by Trump’s toxic myth of a stolen election and the Jan. 6 assault by his believers on the U.S. Capitol. In the days before Trump was impeached for an unprecedented second time, by a vote of 232-197 in the House for “incitement of insurrection,” corporate leaders began distancing themselves from Trump at increasing speed.
First came the immediate statements of shock and dismay, echoing from Wall Street to Silicon Valley. Citigroup CEO Michael Corbat said he was “disgusted by the actions of those who have stormed the U.S. Capitol.” Accenture CEO Julie Sweet called for elected officials to “bring to justice the perpetrators of today’s violent assault on our country.” Sundar Pichai, CEO of Alphabet, Google’s parent company, said in an email to employees that the events were “shocking and scary for all of us.” He added: “The lawlessness and violence occurring on Capitol Hill today is the antithesis of democracy and we strongly condemn it.” JPMorgan’s Dimon weighed in with his own strong condemnation.
Even two of Trump’s billionaire backers, Blackstone Group CEO Steve Schwarzman and Home Depot co-founder Ken Langone, said they were horrified at the turn of events. Their support for a fellow businessman as the country’s CEO had ended in catastrophe. Langone told CNN that he felt “betrayed” by the Republicans who attempted to overturn the election. "Last Wednesday was a disgrace and should never have happened in this country and if it doesn't break every American's heart, something is wrong. It breaks my heart, for sure. I didn't sign up for that," said Langone, adding that he would “do everything I can” to support President-elect Biden.
Then came the acts of separation. Trump’s internet empire collapsed as Twitter, Facebook and other social-media platforms shut him down. Trump’s business partners, ranging from the PGA Tour to the real-estate giant Cushman & Wakefield, terminated deals with him. His bankers started closing his accounts. The city of New York dropped him as the manager of ice rinks and a golf course. Major corporations halted their campaign donations, in some cases to all 147 Republican members of Congress who heeded Trump’s call to object to Biden’s victory. In an extraordinary move, the National Association of Manufacturers, long loyal to Trump, burned its bridge by calling for him to be removed from office. “This is chaos,” said the group’s statement. “It is mob rule. It is dangerous. This is sedition and should be treated as such. The outgoing president incited violence in an attempt to retain power.” All told, Trump fell practically overnight from a problematic partner to a full-fledged pariah.
More importantly, the end of the Trump era raises a host of questions about how Corporate America moves past the effects of its relationship with a president who Slate described in 2017 as “a walking violation of a host of human-resources policies [who] stands in stark opposition to the corporate-style progressivism that permeates so many consumer-facing companies today.” Among the questions: What should corporations do to shore up democracy? Should they be taking more of a stand on social and political issues? How can they address the deep polarization that may divide their employees and customers? And how can they respond to the renewed shock of their Black employees who, less than a year after George Floyd’s death, witnessed an assault on the U.S. Capitol by rioters carrying Confederate flags? A closer look at Corporate America’s relationship with Trump and what lessons may have been learned:
Enabling a Dishonorable Leader
As corporate leaders ran away from Trump, business journalists were eager to ask what took them so long–and who should be held accountable. “There were many enablers–educated, smart, articulate, often wealthy people who were willing to ignore Mr. Trump’s threat to democracy in the name of economic growth, lower taxes, lighter regulations, or simply access and proximity to power,” wrote the editors of the Dealbook newsletter from the New York Times. “At a time when business leaders tout their ‘values’ and ‘social responsibility,’ how should those enablers–and the institutions they run–be considered after all this?”
“This is what happens when we subordinate our moral principles for what we perceive to be business interests,” said Darren Walker, the president of the Ford Foundation and a board member at Square and Ralph Lauren, in a conversation with David Gelles of the Times. “It is ultimately bad for business and bad for society.” Calling CEOs complicit in the Washington riot, Hank Gilman, editorial director of Newsweek, wrote: “You have to do business with politicians you don’t agree with. But you don’t have to check your morals at the door.” His prescription: cut off the money. He urged corporations to halt campaign funding for Trump’s Republican enablers in Congress as well as far-right Washington lobbying organizations.
Disconnecting the Tweeter-in-Chief
Before he was impeached a second time, Trump suffered nearly as consequential a calamity for a master of social media: he was de-platformed. Twitter, where the president had more than 88 million followers, first suspended his account temporarily after Jan. 6 and then made it permanent, citing “the risk of further incitement of violence.” Facebook, whose founder Mark Zuckerberg had declared at a White House dinner in 2019 that Trump was “No. 1 on Facebook,” banned Trump indefinitely, as well as on the company’s Instagram platform. “We believe the risks of allowing the President to continue to use our service during this period are simply too great,” Zuckerberg said in a statement.
Trump’s use of social media had been a point of contention for years, pitting arguments in favor of free speech vs. alarms about the thousands of falsehoods he spread on issues ranging from the coronavirus to mail-in ballots. While the relationship between Trump and the platforms was stormy, it was immensely lucrative for both sides. The deadly rioting on Jan. 6, as well as Trump’s unrepentant statements afterward, finally tipped the balance. “The internet as most people know it has decided that Trump is no longer welcome. It’s a turning point for digital speech that was years in the making, but it took just a few hours to happen,” wrote David Ingram of NBC News.
The sudden moves left Trump supporters wandering in the social-media wilderness. Other tech giants joined the clampdown as Trump fans migrated from the mainstream platforms to freewheeling, conservative-friendly sites like Parler, which has been accused of providing a venue for planning the Capitol attack. Amazon responded to the situation by kicking Parler off its cloud-computing service, leaving the platform at least temporarily homeless. (Parler has sued Amazon for the move.) Both Apple and Google had already booted Parler from their app stores. “It was the nuclear option,” given the “extraordinary circumstance” of the assault on the Capitol, said Columbia University First Amendment scholar Katie Fallow. In an internet environment dominated by the giants, the maverick site Parler will face a difficult road back, in part because it was so poorly constructed that a hacker says she was able to scrape 99% of the posts from the service, thus pulling back any presumed cloak of secrecy for its users.
Have the events of January inspired social media to grow a conscience? To some degree. “What we’re seeing is a shift from the platforms from a stance of free-speech absolutism, towards an understanding of speech moderation as a matter of public health,” said civic-media professor Ethan Zuckerman of the University of Massachusetts-Amherst, in comments to the AP. Yet more radical reforms may be necessary, especially since ascendant Democrats in Washington are contemplating a punishing wave of regulation. “Until social media companies are willing to fundamentally change their sites by making them far less attractive to people seeking to post divisive content, deeply troubling posts will continue to spread quickly and broadly,” wrote tech journalist Greg Bensinger in the New York Times.
Washing Out the Stain of the Trump Brand
In a movement that became a stampede, brand-name businesses and other organizations moved swiftly to disassociate with Trump’s businesses, which were already struggling during the pandemic. The PGA of America announced that it would terminate an agreement to play next year’s PGA Tournament at Trump National Golf Club in Bedminster, N.J. Losing the PGA event, one of the big four tournaments on the pro golf tour, is a major blow to the Trump Organization’s golf businesses, which reportedly account for nearly half of the company’s revenue. Real-estate giant Cushman & Wakefield, which handles leasing for many of Trump’s properties, declared this week that it “would no longer do business with the Trump Organization.” Other business partners cutting off Trump were Shopify, which ran the president’s e-commerce stores, and Stripe, which processed payments for Trump’s campaign website.
With a hint of relish, Trump’s former hometown of New York City terminated its contracts with him to run two ice rinks, the Central Park Carousel and a golf course in the Bronx. “Inciting an insurrection against the U.S. government clearly constitutes criminal activity,” declared Mayor Bill de Blasio. “The City of New York will no longer have anything to do with the Trump Organization.” Since it was Trump’s speedy 1986 renovation of the decrepit Wolman Rink that launched him as a media celebrity, the end of the contract is particularly symbolic of Trump’s fall from local hero to persona non grata.
Bankers were deserting Trump as well. Deutsche Bank, one of the last of Trump’s institutional lenders, “is moving to distance itself from the President’s business and is unlikely to lend it more money,” a source told the Wall Street Journal. New York-based Signature Bank said it was closing two of Trump’s personal accounts and put out a statement telling him to resign. Since Trump has more than $300 million in personally-guaranteed debt coming due in the next four years–he has haughtily called it “a peanut”–he could be facing a financial crisis of his own before long. To raise cash, his company has been attempting to sell the long-term lease on his opulent hotel in the Old Post Office building in Washington, D.C., as well as his stake in two office towers in New York City and San Francisco.
Essentially, by refusing to abide a peaceful transition to private life, the president sabotaged the potential recovery of the Trump brand. “Through his encouragement of rioters who ransacked the U.S. Capitol, Trump has made his company a pariah and driven away allies who could have brought it revenue and post-politics credibility,” the Washington Post concluded.
Hitting Pause on Campaign Contributions
A parade of companies moved briskly to suspend political donations to the 147 Republican members of Congress who objected to certifying the election results on Jan. 6. Among those was Walmart, which has 1.5 million U.S. employees and has become a bellwether on social issues in recent years. Other companies cutting off contributions were Marriott, Dow, Airbnb, and Morgan Stanley. (Hallmark went a step further, asking two Republican senators for its money back.) “This is spreading like wildfire,” Yale management professor Jeffrey Sonnenfeld told the Associated Press. “The U.S. business community has interests fully in alignment with the America public and not with Trump’s autocratic bigoted wing of the GOP.”
While many other corporate donors shut off the campaign-finance spigot for now, some were more circumspect in doing so, pausing donations to both parties (even though that also penalized lawmakers who voted to uphold the election). They included Google, Goldman Sachs, Ford, Citigroup and Coca-Cola. The de-funding moves came surprisingly fast. “It looks like it is sincere for many of the corporations,” Craig Homan, a campaign-finance expert with Public Citizen, a liberal consumer-advocacy organization, told the AP. “There was no big public push or pressure to get Marriott and others to announce they would no longer make campaign contributions. They did it on their own–they shocked everyone in the campaign finance community.”
The impact of these moves will be mostly symbolic, however, since corporate contributions make up only a fraction of total campaign donations–and are likely to start flowing again when the 2022 Congressional races heat up. (Major tech and media companies have donated to the Biden inaugural committee.) Even so, several groups intend to keep the heat on. The Leadership Now Project, a pro-democracy a coalition of business leaders, plans to encourage companies to withhold funding from elected officials and media channels deemed to have spurred the insurrection.
Talking to Employees About Yet Another Crisis
As they have done so many times in the past year in response to the pandemic, racial injustice and economic recession, business leaders were obliged to tell their employees where they stood. In one notable case, Visa CEO Al Kelly went beyond the standard condemnation of violence and addressed the misinformation that inspired it. “Absolutely no facts since the election have surfaced to suggest that Biden’s victory is not totally legitimate,” Kelly said in a memo to employees. “We at Visa stand 100% behind the result of the election and the collective voices of the citizens of this country.” Since workers tend to trust their employers for information more than other sources, business leaders have a potentially strong role in rebutting noxious myths and conspiracy theories.
“When major events like this happen, with millions of people watching, the workplace spillover is inevitable,” noted three business professors writing last week in Harvard Business Review. Executives may be uncomfortable about addressing events that bring up strong emotions and opinions among employees–and wind up saying little or nothing. “Resist that tendency. You need to instead lean into this moment of disbelief, frustration, anger, fear, and anything else people might be feeling–not only today but from here on out,” they counseled, offering specific advice to managers about talking to their teams. “This is yet another opportunity for managers to put those corporate ideals into practice on the ground.”
The fallout from Jan. 6 may apply in extra measure to Black employees, who not only saw a white mob assault the U.S. Capitol, but could plainly see racial inequities in how the law-enforcement response was much more restrained than the often brutal tactics used recently on racial-justice protestors. "No one can tell me that if it had been a group of Black Lives Matter protesters yesterday that they wouldn't have been treated very differently than the mob that stormed the Capitol," Biden said in the aftermath. "We all know that's true–and it's unacceptable."
Shoring up Democracy as a Business Value
In the aftermath of the assault on democracy, which is likely to continue for some time, does Corporate America have a greater interest in repairing the damage? Yes, writes Harvard professor Rebecca Henderson, author of Reimagining Capitalism in a World on Fire. “This week’s events have demonstrated that we cannot take our democracy for granted,” she writes. Citing polls that suggest that 45% of Republicans approve of the assault on the Capitol, implying that they see nothing wrong with trying to overturn an election by force, Henderson contends that “this belief is a fundamental threat to the long-term health of our economy and the strength of American business.” Without good government, corporations wouldn’t be able to rely on free and fair markets, public infrastructure, and the other conditions business needs to thrive. She suggested three initial steps for business leaders to take: speak out in support of democracy, act collectively, and address the roots of the problem.
In a post-truth era, can business help lead the U.S. back toward a fact-based culture? There’s reason for optimism about that, writes David Kirkpatrick, editor-in-chief of Techonomy. “Conspiracy theories undermine the landscape in which business operates. It is, by definition, grounded in the world of facts. There is, truly, a bottom line. Otherwise, CEOs cannot properly run companies,” Kirkpatrick writes. “It’s only possible to make progress as a business if you know what is going on. Understanding that helps explain why business leaders now recognize they must speak out to try to remedy the unhinged and haywire direction in American public debate, and the ascendancy of fact-free opinion and irrational action.”
Asking fundamental questions about the role of business in a democracy would be a good thing to do even at the startup level, when companies like Facebook, Twitter and YouTube are being launched. “The U.S. has a long history of racism and class division, both of which were rapidly accelerated by tech booms,” writes Brooklyn-based venture capitalist Charlie O’Donnell in a thoughtful post on Substack. O’Donnell proposes that before VCs pour money into a venture, they should feel obligated to consider how a disruptive new business will affect workers, consumers, and society. “Should this matter to venture capitalists? Aren’t we all just it in for the money alone?” he asks. “Well, it’s kind of hard to make money if the long-term consequences of your investments threaten the free and open democracy that underpins our society.”
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