Disney CEO Bob Chapek recently issued a forthright apology to employees of the company, many of whom had called for a mass walkout, to protest against Chapek’s silence on a bill passed by the Florida legislature that curtails gender rights in schools. The company has been witnessing protests by fans of its films and by sections of investors as well. Chapek has promised to actively campaign against another bill in Texas that would criminalize medical assistance to children suffering gender dysphoria, feeling a misfit in their biological sex and seeking to transition to a different gender.
In other words, Disney is taking a stance on hot-button political issues, going against the traditional norm that companies should focus on making money and leave politics to politicians. Can this trend come to India, and if it does, how should companies respond?
It is useful to read bits from Chapek’s letter to Disney employees: “Thank you to all who have reached out to me sharing your pain, frustration and sadness over the company’s response to the Florida “Don’t Say Gay" bill. Speaking to you, reading your messages, and meeting with you have helped me better understand how painful our silence was. It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry.
“Our employees see the power of this great company as an opportunity to do good. I agree. Yes, we need to use our influence to promote that good by telling inclusive stories, but also by standing up for the rights of all."
The Walt Disney Company is an entertainment behemoth that owns, apart from film studios, and television channels, three streaming platforms — Disney Plus, Hulu (jointly with Comcast) and ESPN Plus — and entertainment parks around the world. It owns the Star Wars franchise, the Marvel Cinematic Universe and Pixar Studios.
Investors want the company to produce revenues and profits — after the pandemic boost to entertainment consumption has subsided, Disney’s share price has been struggling, its theme parks are understaffed and the pains of combining streaming new productions with theatre releases have been crimping Bob Chapek’s gait as CEO, running, as he is, in his predecessor Bob Iger’s oversized shoes. So the protest from employees, fans and shareholders over the company’s failure to speak up for the rights of the LGBTQ community in Florida, a state where Disney has a large presence (and juicy tax breaks) amplifies the CEO’s challenges.
In essence, the problem is this: should companies get involved in politics? Of course, companies have been dragged into political controversy in the past, too. In Georgia, a bill that was widely perceived as seeking to restrict the voting rights of black people elicited, after initial hesitancy, strong opposition from Delta, the airline, Coca-Cola and Major League Basketball.
Should companies really get involved in politics? At one level, the question is hypocritical. Companies are very much involved in politics via campaign finance. In the US, corporate donations are capped for individual politicians, but they can fund political action committees (PACs) and SuperPACs liberally. By funding liberal/conservative causes and specific campaign themes, companies have been involved in shaping political choices in the US from before the time of the Robber Barons.
In India, too, of course, the largest donors to political parties are companies, whether they make their contributions overtly or covertly. In India, there are two kinds of covert contributions, of course: via the traditional, off-the-books route, in which no one knows who gave whom how much, except for the recipient and the donor; and the new electoral bonds route, in which apart from the donor and the recipient, two other entities are in the know: the bank that issues the bonds and redeems them later knows who took which numbered bond and which party converted that bond into money, and the RBI, which regulates the banks.
So, the question boils down to whether companies should transparently adopt political positions or not. In India, we have seen companies that put out advertisements on cultural integration being targeted by the peddlers of sectarian schism. We see companies cosying up to the powers that be, we see companies seen to be close to the Opposition facing income tax raids. So, should companies boldly go where no company has gone before or should they stick to behind-the-scene lobbying, funding and influence-peddling?
The new global penchant for Environmental, Social and Governance factors in corporate performance makes it easier on the corporate conscience to get dirty in the political playground. Getting dirty is one thing, but getting your bones broken in the scrum is something else. It would be safe for corporate executives to take broad positions on social and political issues, provided they have clarity on moral purpose, clarity on constitutional values and clarity on public tolerance of corporate posturing on matters outside the world of business.
Ultimately, companies respond to the revealed preferences of their stakeholders: consumers, investors and employees. Where these align, companies can take a stance without difficulty. Where these conflict, and the company’s stand matters little to the issue at stake, silence would be golden. But where the conflict has a larger impact on social cohesion and, therefore, long-term prosperity of the economy and the company itself, corporate leadership could take a stand that is congruent with the values of the Constitution — carefully couched to elicit empathy rather than hostility.
