The Myth of the ‘Woke’ Corporation
“Whatever you do, lead with your values,” Apple CEO Tim Cook recently told the graduating class at Gallaudet University. Well, that leaves it wide open, doesn’t it? In Apple’s case, what values allow it to manufacture in China, a country that has crushed democracy in Hong Kong and violated the rights of millions of Uighurs on the mainland? Yet iPhones today are allowing citizens and soldiers of Ukraine to use technology to fend off the invading Russian hordes. Or consider McDonald’s, which closed some 850 stores in Russia, laying off 62,000 people. This is the same McDonald’s that is being accused by investor Carl Icahn of being complicit in ruthless treatment of pigs by vendors who supply meat for McRib sandwiches. Then there’s Tesla CEO Elon Musk, who claimed to eschew politics before tweeting, disingenuously, that he was becoming a Republican because the Democrats are the party of hate, notwithstanding the GOP affiliation with the clearly hateful and racist “replacement theory” that motivated an 18-year old domestic terrorist in Buffalo, NY, to murder 10 people. That’s not going to play well among California’s liberal Tesla owners—who now have many more EV models to choose from. And there’s no more emotional and potentially divisive topic than abortion rights. The issue is so fraught that the public relations firm Zeno advised its corporate clients to do zero–to run and hide. No, you don’t. Businesses that don’t confront such issues face the possibility that a relatively small group of white, male, you-don’t-even-have-to-say conservative legislators and regulators in states such as Texas and Oklahoma are going to dictate national policy. Which is why companies as diverse as Citigroup and Chobani quickly revised their benefits programs to include travel for out-of-state abortion services. If young people today want to work for a company that has a purpose, then defining that purpose in all its forms–political, social, environmental, racial and even local–has never been more complex for corporate America. Likewise for investors and investment companies. BlackRock has drawn fire from both conservatives for its stance on environmental, social and governance (ESG) issues, and from liberals for its investments in China. In Florida, the Walt Disney Co. first tried to escape the debate over that state’s so called “Don’t Say Gay” bill. But Mouse House employees, particularly its creatives, were having none of it. The company then broadcasted its dissent against the gay-bashing legislation. Disney’s support of its own LGBTQ community, in turn, made it a target for Florida’s reactionary governor Ron DeSantis, who orchestrated legislation that stripped Disney of its special tax and government status in the two Florida counties where Disney World operates. (Also potentially leaving the state on the hook for hundreds of millions of dollars of bond payments.) Then DeSantis vetoed funding for a training facility for the Tampa Bay Rays in part because the team spoke up against gun violence. Apparently, the governor favors it. But Disney’s customers voted Mickey over Ron—that is, they continue to flock to the Orlando resort and watch Disney movies. Those include the thousands of LGBTQ customers who show up, and are welcomed, for unofficial Gay Days at the resorts. A Dick’s Sporting Goods store in Michigan, one of more than 700 in the U.S. In 2018, the company halted sales of assault weapons in all of its stores (Photo by RiverNorthPhotography/iStock by Getty Images) The fact that a Republican governor would try to harm a Fortune 100 company that employs more than 70,000 Floridians underscores how divisive the politics have become. The fact that consumers have largely ignored DeSantis shows that they respect thoughtful corporate decisionmaking about controversial issues. And well they should. Yet another mass shooting event in Texas, in Uvalde, once again focused attention on assault rifles. But it was following a mass shooting at Parkland high school in Florida, in 2018, when Dick’s Sporting Goods CEO Ed Stack pulled assault rifles from the company’s stores and halted gun sales to anyone under 21 years of age. That decision would cost the company some $250 million in sales initially. But Stack, a gun owner, had had enough. He told me: “After Parkland, I said, ‘We’re done. We’re not selling these guns, we’re not selling high-capacity magazines, we’re not going to sell any guns to anyone who’s under 21.’ That was it. We’re never going to change our mind on any of that.” Sales would eventually rebound because most Americans want to ban assault rifles, too. Walmart, no paragon of wokeness, made a similar call on behalf of its customers. This is a company that is now making a big investment in health care, because it can see the great need, and opportunity, among its customers and employees. To that end, Walmart recently banned cigarette sales in many of its stores even though the company, via a subsidiary, was once the largest tobacco wholesaler in the country. Selling death while at the same time trying to prevent death is a mixed marketing message at best, so Walmart made a choice: your health matters. We’ve already watched the Trump Administration play divide and conquer with corporate America in its defenestration of the Environmental Protection Agency and the trashing of pollution regulations. In clashing with the state of California over its stringent automobile standards—Trump demanded lower fuel efficiency—the administration forced automakers to choose sides. GM, Fiat Chrysler and Toyota, conservative by nature, backed into Trump’s garage. Honda, Volkswagen, BMW and Ford (with the support of executive chair Bill Ford), boldly backed California. These firms were already moving swiftly to expand their EV offerings; siding with California enhances their EV cred and offers a market advantage by doing so. Ford’s F-150 Lighting EV pickup, for instance, is already a breakout star. Corporations need to look a decade ahead to stay ahead. Any company that wants to be aligned with the future can’t avoid addressing human rights, animal rights, government actors, health care, sustainability and the environment. Not that the path is straightforward or even logical. Consider that Texas (once again) bars state retirement and pension funds from investing in companies that want to reduce fossil fuel consumption. Also consider that Texas is the nation’s leading producer of wind energy. If you build wind turbines, doesn’t that make you anti-fossil fuel by definition? Texas pols can deny climate change, but those denials will provide little protection when a monster hurricane–one of the consequences–wipes out Galveston. (Again. In 1900, more than 6,000 people died in such a storm.) And even if Galveston is spared, homeowners in coastal areas that haven’t prepared for extreme weather tied to a warming climate are already seeing sharp increases in flood insurance, if they can buy it at all. Which is to say that even if the free market doesn’t have a conscience, it tends to be rational. The defeat of two ExxonMobil board nominees last year by an activist hedge fund that criticized its strategy around climate change didn’t suddenly transform a hydrocarbon giant into an alternative-energy outfit. But that outcome did demonstrate that ExxonMobil wasn’t as focused on the future of clean energy as it might be—and that’s a market risk shareholders don’t care to face. ExxonMobil’s investors were indeed following their own values–while at the same time addressing shareholder value. That shouldn’t be such a rare event in corporate America. And if the graduates at Gallaudet follow the advice of Apple CEO Cook, it won’t be. Bill Saporito is an editor at large at Inc. magazine.