MSL Wants to Learn More About How Corporate Activism Influences Stakeholder Behavior

 

Companies including Bank of America and NASCAR helped convince North Carolina lawmakers to rescind the state’s anti-LGBTQ “bathroom bill.” Nike blew past boycott threats and leveraged an explosive ad campaign, featuring former NFL quarterback and racial equality advocate Colin Kaepernick, to attain its highest market cap to date. Patagonia, REI and other outdoor gear giants are suing the federal government to protect public lands.

Indeed, those watching the daily headlines will find no shortage of examples of leading companies stepping into the fray and making their voices heard on contentious social, political and environmental issues. And research shows that stakeholders—ranging from consumers and employees to investors—increasingly expect companies and their executives to get off the sidelines and engage in this type of corporate activism.

More than 85 percent of consumers believe companies should take a stand on social issues, according to a 2018 survey from the Shelton Group, and 64 percent of those polled in Edelman’s 2018 Trust Barometer think CEOs should take the lead on pertinent issues rather than wait for government. Meanwhile, roughly half of employees at America’s largest firms—valued at $1 billion or more—say a failure to act on social issues would affect their decision to maintain or pursue employment with a company, according to a 2017 Povaddo survey.

Though findings like these demonstrate a clear correlation between corporate activism and brand reputation, it remains difficult for business leaders to predict how their stakeholders will respond if they speak out—or stay silent. To that end, global communications firm MSL put together a research study to assess how corporate activism influences stakeholder behavior.

“The landscape for brands and companies around social activism and social purpose is evolving with lightning speed,” said Ron Guirguis, CEO of MSL U.S. “It’s a priority issue for our clients and for our global organization, so we set out to understand how consumers and employees are reacting.”

Specifically, MSL is looking to find out what type of issues matter most to consumers, employees and other stakeholders—and how a company’s response to those issues may influence stakeholder perception of the brand. “We wanted to learn about new consumer and employee expectations for brands and which issues resonate the most,” Guirguis told TriplePundit. “We also wanted to begin to measure—for the first time—the spread between what consumers say and the actions they are actually taking.”

That last point is a crucial one—responding to a survey is one thing; changing your behavior is quite another. Previous research shows a discrepancy between consumers’ stated interest in sustainability and their actual purchasing patterns, for example. The numbers indicate a similar disconnect between purpose-driven career aspirations and how employees actually feel at work: though nearly 75 percent of global professionals want to feel like their work matters, the vast majority of the workforce say they are disengaged from their jobs.

When it comes to corporate activism, the decision to act is already a difficult one for brands—and it becomes even more challenging in the absence of information about their stakeholders’ values and how they may respond. “Brands today often need to make hard choices when it comes to social issues, and make them quickly,” Guirguis explained. “The days of being everything to everyone are gone. Brands may choose to take a stand on a controversial social or political issue, based on a very clear understanding of who they are and who their customers are.”

Though prior research exists, much of it is dated—and as the landscape around corporate activism continues to evolve quickly, business leaders need the latest data to inform decisions that may prove hugely consequential to their brands, Guirguis said.

“We need to measure how consumers are thinking about it now,” he told us. “We conducted an enormous amount of global research on social purpose in 2014. What stands out is that even the language we used to define it then—”business citizenship”—is now outdated. Today’s social activism requires companies to do more than just the right thing—it’s requiring a much deeper understanding of the organization’s obligation to help solve some of our most difficult and divisive social issues.”

In order to understand where they are best positioned to act—and where they’re not—it’s now more important than ever for companies to have a firm grasp on their values and those of their stakeholders. “Once a company identifies and articulates its purpose, these decisions become easier and natural,” Guirguis said.

For more information on trends shaping brand activism in 2018, check out our interview with MSL SVP Sheila McLean in the latest issue of CR Magazine.

MSL will release its research next week at 2018 3BL Forum: Brands Taking Stands—The Long View, held October 23-25 in National Harbor, Maryland. Guirguis will join NPR’s Louise Schiavone, Sherrie Deans, executive director of the National Basketball Players Association Foundation, and other thought leaders at a Town Hall during the Forum to discuss corporate activism in greater detail.

Along with MSL’s forthcoming research, the Town Hall will take a closer look at how companies are responding to stakeholder pressure around corporate activism and assess whether the broader “Brands Taking Stands” phenomenon is a movement or a moment. Registration is currently underway, and a 25 percent off discount is available with the use of the code 3BL2018TOWNHALL.

Image credit: Vlad Tchompalov via Unsplash