There have been few political issues in the last 50 years that have engendered as much anger, emotion and division among the American public as abortion. No matter what position one takes, at least half of the country will oppose it, some with vitriolic intensity. One benefit of working in the corporate governance space has been the avoidance of this issue and its consequent pitfalls — at least until now.
This June, in a much-anticipated ruling, the U.S. Supreme Court in the Dobbs case rejected the federal protection of abortion proscribed by an earlier Court in Roe v. Wade — a 50-year precedent — and returned the issue to the individual states to resolve. The public response was predictably split — some rejoicing over the ruling, others reviling it. This was no surprise given abortion's long-standing controversy.
What was surprising, however, was corporate America's reaction. While no CEO, to my knowledge, publicly expressed support for the ruling, a number of large corporations announced that they would protect their employees' right to an abortion, even going so far as to offer to pay for out-of-state travel to receive such a procedure unavailable legally in their home location. Numerous political pundits applauded this step, suggesting that such companies' CEOs were courageous in facing down a dangerous Supreme Court. As citizens of society, corporations and their CEOs, they argued, had a moral and ethical obligation to speak out on important social issues and to become change agents in societal debate.
I completely and thoroughly disagree with this characterization and the actions of such corporate leaders. It is not that I quibble with their personal and social beliefs. Rather, I do not believe the corporations they lead should take positions on the political issues of the day, except those that inspire regulation that directly affects the company's business.
But why shouldn't a business express outrage at a reviled political position — are they not citizens of sorts in our multifaceted society, the critics argue? This sounds appealing on its face, but is very concerning upon deeper examination. Corporations are not living organisms. They are simply a collective and cooperative assembly of individuals/investors, employees, customers and suppliers. As divided on the abortion issue as is the body politic, so are the various individuals that compose these groups. So, for a CEO to direct an organization to take a particular stance here is sure to be emotionally supported by some and virulently opposed by others. This is particularly problematic for investors, who may find that their investment in a business is now supporting a political position that they may find abhorrent — one way or another, their investment becomes a forced political contribution.
Perhaps even more disturbing is the effect this may have on the business itself. To produce a superior good or service at a fair price, a business must have the strong support of all its constituencies. A corporate position on an unrelated and divisive issue such as abortion will weaken this support and, ultimately, the business itself, as well as the welfare of its varied constituencies.
The nice thing about a business is that you can take people with differing, even opposing, positions, and, by giving them a common and shared objective — economic success — you unify them, resulting in a stronger business from which all can benefit. Forcing a divisive political position, particularly one with little relation to the business itself, will compromise this success.
Of course, the biggest question of all raised by this issue is, “How did the corporation decide to take a position on the topic in the first place?” Was the board informed? Was there a shareholder vote? Was there a poll of employees, customers and suppliers? Of course not. It was simply the judgment of the CEO, who was not selected by the board based on political considerations. The corporation was never designed to resolve political issues — its goals are economic. It possesses none of the institutional procedures and mechanisms that exist in the governmental sphere to settle these issues democratically. The resting action will thus lack the legitimacy of decisions made in the political sphere that lead to general public acceptance. A CEO-led social directive will only lead to anger among the many corporate constituencies and ultimately create damage to the business itself.
A corporation's primary responsibility is to create shareholder wealth through legal means. If individuals within the organization disagree with a law, they can always act individually to change it. To use the corporate body to do so is wrong and will be destructive to the organization. Leave the issue of abortion to the politicians and stick to the business of the business.