Ask any successful business owner how they sustain sales and keep customers happy, and you’ll hear one mantra on repeat: understand your customers. It’s Business 101.
Companies should focus on meeting customer needs by providing them with high quality products and services. But many companies have lost sight of this goal, focusing instead on politically driven activism. And the numbers show that customers and investors aren’t satisfied.
In a new study conducted by Echelon on behalf of The Daily Wire, over 1,000 investors were polled on their thoughts regarding companies’ involvement in Environmental, Social, and Governance (ESG) issues. The results were clear: American investors said by an overwhelming majority that they do not want companies weaving political agendas into their business. Echelon found that “While 29% of respondents agreed it is a ‘good thing’ for companies to leverage their financial power for political or social means supported by executives, 58%—twice as many—said it is a ‘bad thing.’”
Only recently have corporations veered from the historical practice of staying out of politics. They avoided taking sides on contentious political issues for a simple but important reason. They recognized that engaging in partisan politics risked the fiduciary duty they owe their shareholders. A corporation is owned by its shareholders, and they hold diverse views on many issues. Corporations understood that using company resources to promote a particular political agenda forced investors who may not agree with the political position to pay to support it. This is a form of coerced political speech that has also been anathema in American culture and risks violating corporate directors’ fiduciary duty to their shareholders. It thus comes as no surprise that a majority of investors want corporations to stay out of politics.
Moreover, in an already polarized culture, investors don’t want their assets used to make the problem worse—and particularly not when doing so risks alienating a large portion of the population. Publicly traded companies that allow ESG to dictate everything from their workplace policies to their public affairs are opening themselves up to an unnecessary risk and creating a wide chasm between C-suite leaders and the majority of investors.
The Daily Wire poll provides several examples of this disconnect, which is prominently seen in asset managers like BlackRock, Vanguard, and State Street—all of whom “subscribe to ESG.” According to the poll, 64% of the investors believe that asset managers should not prioritize ESG criteria on behalf of their customers. By contrast, only 20% think that the asset managers should be making those decisions on behalf of investors, while 66% said that individual investors should have the choice to opt out of ESG investments.
As this poll makes clear, investors recognize that in the long run, when companies support or denounce controversial bills, publicly back political ideologies, or even bar certain individuals from benefitting from their services due to religious or political beliefs, they’re unnecessarily limiting their own customer base. That’s not just bad business, it chips away at the foundations of a free society and destroys civil discourse in the process.
Given how many companies participate in polarizing activism today regardless of the widespread concern from investors, many C-suite executives are evidently detached from the mindsets of their constituencies.
One example of how companies misunderstand the public today is evident in their disregard of religious freedom. Take charitable giving programs, for example. Many businesses prevent employees from giving to religious organizations. In fact, out of the 50 companies we scored in our Business Index, nearly half have policies that prohibit or threaten to prohibit employees from making matching-gift contributions to certain organizations because of their religious affiliations. Meanwhile, 34% restrict or threaten to restrict employee gifts based on a charities’ religious beliefs.
Perhaps companies are trying to appease customers and employees who aren’t religiously affiliated. Or maybe companies believe that religious life should be private, and has no place being expressed in the workplace. Whatever the reason, companies do a disservice to themselves by telling employees and customers to check their deeply held beliefs at the door.
Leaders at these companies would be wise to familiarize themselves with another poll, released by The Desert News. Although Americans are split on the role that faith should play in daily life, the poll indicates that 8 in 10 Americans—including 82 percent of those who do not practice a religion—feel comfortable with co-workers knowing their religious beliefs. Furthermore, nearly half of those polled say faith is a valuable component of work behavior. This squares with Pew Research indicating that more than half of the American public believes that religious organizations benefit society.
So when companies bar employees from giving to religious organizations through company matching gift programs, they signal that they’re out of touch with the general population. When there’s a dissonance between what investors, employees, and customers want and what companies think they want, viewpoint diversity can aid in fixing that blind spot.
When companies are comprised of people of various religious, political, and ideological affiliations, they’re better equipped to understand a wider swath of customers and focus on what should be their main goal—delivering excellent products and services that benefit customers and investors alike.
Explore our tools designed to enable you to do just that. Through our toolkits, research, and model policies, you can conduct audits of employee trainings to determine how divisive they might be, learn more about the value of viewpoint diversity, and implement new policies that ensure you’re better equipped to serve customers and investors with a broad diversity of views.