‘PR Industry Needs to Defend Business against Anti-‘Woke’ ideologues’
In 2018, BlackRock chairman and chief executive Larry Fink released a letter to S&P 500 CEOs in which he called for companies to look beyond short-term profit and “benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate.”
There is a pretty strong case to be made, with the benefit of hindsight, that Fink’s pronouncement about the need for companies to focus on what was then thought of as corporate social responsibility and what is now more broadly known as ESG (environmental, social, and governance) kicked off a new era for public relations professionals. After all, understanding, listening to, engaging and mobilizing stakeholders is the core of our profession.
And the next five years brought a succession of events that elevated the role of public relations even further. Later that same year, the Business Roundtable adopted a new statement on the purpose of the corporation, acknowledging that “each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.”
Then came the pandemic, which compelled companies to put the health and safety of employees and customers ahead of short-term shareholder interests; the Black Lives Matter movement in response to the murder of George Floyd, jarring many corporations out of their torpor on issues related to diversity, equity and inclusion; the ‘quiet quitting’ and ‘great resignation’ trends, which restructured the relationship between employers and their workers; and finally the Russian invasion of Ukraine, which forced companies to consider reputation risk in a whole new light.
As a result, the corporate communications function has been elevated to mission critical status inside well-run companies. Public relations professionals are now advising on stakeholder expectations, on defining and communicating purpose, on when organizations should engage with social and political issues, on internal policies that do not exclude large numbers of talented employees or potential customers, and even on whether companies should continue to do business in geopolitical hotspots.
This is, supposedly, the ‘seat at the table’ for which we have been clamoring since I started writing about public relations. I understand the desire to celebrate, to enjoy our newfound respect. But we cannot be complacent. We need to do a better job of explaining why these issues matter — because the idea of stakeholder capitalism, of ESG and DE&I as legitimate business functions, is under attack. And while those attacks are ill-informed, replete with disinformation and distraction, and motivated almost entirely by bad faith, the threat is real.
Silicon Valley Bank meets the ‘wokeness’ panic
“While Silicon Valley Bank collapsed, top executive pushed ‘woke’ programs.” This is an actual headline that appeared in the wake of the Silicon Valley Bank collapse (albeit in the New York Post, a publication that abandoned any pretense of serious journalism many years ago).
A closer reading reveals a train of thought that stands as a wonderful example for anyone seeking to illustrate the post hoc propter hoc fallacy, but not much more. Author Katherine Donlevy begins her piece by detailing initiatives promoted by a UK risk management executive of the bank (“the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth”) without mentioning the fact that the UK operation was a separate ring-fenced entity from the US bank that collapsed and, despite the problems in the US, was entirely solvent.
Donlevy then went on to quote Bernie Marcus, a founder of Home Depot who in recent years has succumbed to Rudy Giuliani-style conspiracy theories and imagined grievances, who claimed (without anything even remotely resembling evidence) that: “These banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is, shareholder returns.”
Meanwhile, The Wall Street Journal was asking “Who Killed Silicon Valley Bank?” — a question it elected to answer with only a passing mention of venture capitalist Peter Thiel, who helped to spark the panic that saw investors engage in a classic bank run. Instead, the column offered this apparent non-sequitur: “In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have ‘1 Black,’ ‘1 LGBTQ+’ and ‘2 Veterans.’” Ah yes, the famously pernicious influence of veterans, whose mere presence in a boardroom can cause a company to forget what governance means.
Unless readers fail to grasp his real point, author Andy Kessler followed up with the classic ‘only asking questions’ formulation designed to make baseless speculation seem somehow legitimate. “I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”
Kessler’s theory, if I am reading it right, is that the (predominantly elderly, white, cisgendered male) management of Silicon Valley Bank put too much capital into “higher-yielding long-term government bonds” because they were unable to think straight due to mental fatigue incurred after seeking a single LGBTQ+ director for their board.
At this point, I should remind our readers that Kessler is employed by the Journal to write “on technology and markets and where they intersect with culture” and that this idea — thinking about diversity so discombobulates experienced bankers that they make terrible investment decisions — makes perfect sense to him.
(For what it’s worth, Bloomberg’s Matt Levine helpfully provided a detailed and not remotely insane explanation of what really happened with SVB.)
Was Silicon Valley Bank in any way ‘woke’?
So far, this column is merely a commentary on the way in which journalistic standards — if that term can be applied to outlets like the Post and the Journal — have declined. Any media organization that uses the word ‘woke’ in a headline is insulting the intelligence of its viewers and/or readers, unless it then goes on to offer a precise definition of the term and an explanation of what it means in context.
So what does ‘woke’ mean in this context?
One definition comes from Bethany Mandel, a conservative author who literally wrote a (best-selling) book on the topic. Those with Twitter accounts will recall Mandel for her utter failure to define ‘woke’ during a live television interview, but a few days later she sought to correct that brain freeze and offered the following definition. Woke, she says, is “a radical belief system suggesting that our institutions are built around discrimination, and claiming that all disparity is a result of that discrimination. It seeks a radical redefinition of society in which equality of group result is the endpoint, enforced by an angry mob.”
It’s hard to believe that those who were calling SVB woke seriously believed that a financial services company serving the most libertarian sub-section of American society was seeking “a radical redefinition of society in which equality of group result is the endpoint, enforced by an angry mob.”
So perhaps those who attacked SVB were using a less strident definition, similar to the one offered by an attorney for Florida Governor Ron DeSantis — who has shot to national prominence because of his attacks on ‘wokeness’ — who told a court that woke refers to “the belief there are systemic injustices in American society and the need to address them.”
By that standard, I would like to think that any sentient American would self-identify as woke. The idea that there are injustices in American society — that certain groups have been discriminated against over the course of the nation’s history, and that the effects of that discrimination linger today — seems irrefutable. In which case, attempting to address those injustices is simply an attempt to create a more level playing field, of allowing all Americans the opportunity to achieve their full potential.
Are there companies making a genuine, good faith effort to address the consequences of historic injustice? I am sure there are (though I believe that their motivation is pragmatic rather than based on altruism or ideology — more on that later). Was Silicon Valley Bank one of those companies? The evidence is, to say the least, mixed.
You might not think so, of course, if you read columns like this one in Newsweek by Jeff Charles, who reports that “a database created by the Claremont Institute revealed that SVB either donated or pledged to donate almost $74 million to organizations affiliated with the Black Lives Matter movement.” Charles goes on to allege all manner of scandals involving Black Lives Matter Global Foundation — in a way clearly meant to imply that the Foundation was one beneficiary of SVB’s largesse. (“Naturally, this makes one wonder why an organization like SVB, which is supposed to mitigate risk, would be willing to dump so much cash into an obvious grift machine,” he writes).
The answer is that it wasn’t. SVB gave precisely zero dollars to Black Lives Matter or the Foundation. The $73 billion actually breaks down as follows: in 2021, the bank pledged to spend $50 million over five years on an internal initiative called Access to Innovation that sought to connect women, Black people, and Latinos with startup funding (it is not clear how much, if any, of that money was actually invested in the program); a $20 million donation “to support additional Covid-19 relief”; and corporate donations to the NAACP, ACLU, National Urban League and other organizations.
I would suggest that if SVB was actually woke, its critics would not need to resort to such extraordinary levels of intellectual dishonesty to make their case.
“It’s hard for me to see how SVB’s politics had anything much to do with interest rates changing and their balance sheet being vulnerable,” Zach Teutsch, founder of an actually progressive financial advisory firm called Values Added Financial, told Vox. “This sounds like ideology in search of a fact pattern.”
Why this matters to PR people
I have been thinking a lot about the whole issue of woke capitalism over the past couple of years, as the term ‘woke’ has been weaponized by the right to criticize a range of initiatives including CSR, ESG and DE&I programs. And I have come to two conclusions.
The first is that genuinely ‘woke’ corporations are at best ‘black swans’ and at worst ‘unicorns.’ Which is to say, they are either exceedingly rare or entirely fictional. I could make the case that companies like Ben & Jerry’s or Patagonia are genuinely ‘woke,’ that their business decisions sometimes take into account political or social justice criteria because they have values that sometimes supersede profit and loss decisions. (I could also make the somewhat more cynical case that what looks like social conscience is, in fact, smart brand-building.)
For the vast majority of companies, however, ESG and DEI initiatives — and other examples of so-called ‘wokeness’ — are being prioritized for pragmatic reasons. They are either a response to real-world business requirements (diversity initiatives expand the available talent pool, climate change has clear economic implications) or to meeting stakeholder expectations, enhancing organizational reputation and building strong brand relationships.
My second conclusion is that most accusations of ‘wokeness’ leveled against corporate America are just as absurd and intellectually dishonest as the allegations against Silicon Valley Bank. None of those attacking ‘woke’ corporations genuinely believe that America’s CEOs have joined forces in order to promote “a radical redefinition of society… enforced by an angry mob.” Instead, they are angry that the companies involved are no longer happy to be seen as perpetuating discrimination on the basis of gender, sexual identity or ethnicity.
(For an example of the latter, look no further than the criticism of Hershey for featuring a transgender woman in a Canadian advertising campaign.)
But the shallowness of ‘woke panic’ is no reason to ignore it. Authoritarian elected officials are already formulating real-world laws and regulations designed to punish companies they deem ‘woke.’ In Florida, DeSantis has been on a jihad against Disney because of the company’s decision to support the rights of LGBTQ+ young people in the state. And Republican lawmakers are now pushing laws similar to one in place in Texas that will prevent their states from doing business with companies that adopt ESG policies that protect the environment.
And as articles like those in the Daily News and the Journal were widely shared, it became apparent that they will provide a pretext for political ‘investigations’ into whether DEI might crash the US financial system. Indeed, former Trump administration official Stephen Miller first tweeted that he was “shocked to discover that making DEI the new organizing principle of the US financial system has backfired” and later demanded that the “House GOP must subpoena SVB to learn, among other things: How many hours & dollars were spent on equity/DEI/ESG/climate scams.”
Make no mistake, the attack on “woke” corporations is an attempt to subvert the independence of corporate CEOs and other business leaders to a specific political ideology. It is an attempt to ensure that decisions currently made for business reasons are instead at least influenced (and perhaps proscribed) by fears of punitive political measures.
That would be bad for business. It would be bad for stakeholders. It would be bad for shareholders. And it would be especially bad for public relations, both as a discipline and as a philosophical idea (that companies should attempt to build profitable, mutually-beneficial relationships with the societies in which they operate).
That is why I believe public relations practitioners — in their roles as communications leaders for their clients and on behalf of their own profession — need to be in the forefront of defending ESG, DEI and other stakeholder-focused initiatives as strategic business priorities — and not just gratuitous corporate altruism.
That may be challenging, for a couple of reasons. First, because PR people and the companies they work for have spent years talking about corporate social responsibility as an indicator of corporate virtue rather than as simple good business — often as a response to critics on the left, who found the business case for CSR to be cynical and self-serving, when in reality the value of CSR lies in the fact that it is, in fact, entirely self-serving.
And second, because measuring the impact of what we do is still the greatest glaring weakness of our profession. To convincingly demonstrate that CSR, ESG and DEI are truly business imperatives, we need to be able to demonstrate two things: one, that these initiatives contribute to corporate reputation and brand image, and have a meaningful impact on the relationship between an organization and its stakeholders; and two, that enhanced reputation and improved stakeholder relationships have a tangible impact on business performance.
Oddly, the latter challenge might be easier than the former. There is already a significant body of evidence demonstrating the value of reputation and relationships. Our own industry’s Trust Barometer, is an example, but there is also plenty of academic work to draw on. The growing population of data and analytics experts within the PR business should be able to conduct a thorough review of the literature and figure out the impact of stakeholder relationships on corporate performance.
The most challenging aspect might be coming up with a metric that can be embraced by the entire industry, which would thus have a credibility and an authority greater than the plethora of proprietary products that have been developed by individual agencies or measurement companies (many of which, it should be noted, do not answer either of the questions raised above).
Changing the habit of a lifetime, overcoming the impulse to take credit for selfless generosity rather than acknowledging enlightened self-interest, may be more difficult. But it is something companies may need to do if they are to convince hostile politicians that they are protecting the bottom line rather than taking sides in the culture war.
Source: PRovokemedia
