Values are not enough when speaking out

“It’s not about saying anything fancy. You have to get things done.” When he said this, former CEO of the Nature Conservancy Mark Tercek was referring to companies meeting the expectations of customers, shareholders and suppliers on climate change, but his advice rings true regardless of the issue.

The say-do gap on climate change offers a telling example of the accountability challenge that corporations face. Most large global companies that have announced emissions targets for 2050 haven’t yet addressed the critical part of the equation.

When rhetoric fails to match reality

“Sixty-three per cent of the Fortune Global 500 have 2050 emissions targets… and nearly half have set more ambitious 2030 targets,” said Paul Polman, former CEO of Unilever. “But only around a third have set targets for so-called ‘Scope 3’ emissions, which come from their suppliers or the use of their products, despite the fact that Scope 3 emissions account for about 80 per cent of the companies’ total carbon footprint.”

Climate is not the only issue on which rhetoric fails to match reality. More broadly, two-thirds of Americans (68 per cent) believe corporate messaging about social issues is “a marketing ploy rather than an authentic opinion,” according to an Axios Harris poll. And there are many widely publicised examples of the walk not matching the talk on diversity initiatives and racial justice pledges.

Pinterest provides a cautionary tale of what can happen when a firm’s external messaging doesn’t match the internal reality. A few weeks after the murder of George Floyd in the US, two Black women who had recently quit called the company out for promoting a public image that directly contradicted their experience there. “As a Black woman, seeing @Pinterest’s middle of the night ‘Black employees matter’ statement made me scratch my head after I just fought for over a full year to be paid and levelled fairly,” tweeted former employee Ifeoma Ozoma.

The public perceives these disconnects: In 2023, Edelman found that six out of 10 (62 per cent), including majorities across all demographic groups, “believe companies are doing mediocre or worse living up to their promises and commitments to address racism both within their organisation as well as the population.”

Accountability checks as standard

In an era in which stakeholders are increasingly savvy about spin and greenwashing, an accountability check for any kind of public position should be a standard part of brand hygiene. The easiest way to practice this is to be clear in advance about the actions that will back the company’s words.

“One of the guiding principles now with our leadership statements is making sure we’re not seen as performative. That’s always a tricky balance when we’re talking about how a leader is using their platform to talk about a social issue. You don’t want to make it look like they don’t back it up with their actions,” said Michelle Rodriguez of LinkedIn. Before deciding to make an external statement, LinkedIn now considers if it will engage in continual learning on a topic, provide funding for an external organisation, or make internal changes to address the issue. “If it’s just to say something, we most likely won’t do it,” Rodriguez added.

LinkedIn’s approach doesn’t make its decisions easier, but its clarity about the necessity of action can help it determine when not to take a position. These decisions are not just about public relations; they are critical to maintaining credibility with employees. While the downside of failing to back words with action is easy to imagine, companies that get it right also see a big potential upside. A Gartner study of 5,000 employees found that organisational action on issues can lead to a significant increase in the percentage of highly engaged employees.

Backing values with actions

Business leaders should expect employees, customers and other key stakeholders to hold them accountable for bold words that are not supported by actions.

Match the outside story with the inside story: As the Pinterest case illustrates, a disconnect between external statements and internal behaviours runs the risk of turning off customers and demoralising employees. In the worst-case scenario, it sets the table for a PR crisis when the story gets out, which it always does. “When people make commitments, look at how they treat their employees and their customers,” said Eleanor Lacey, general counsel of Asana.

Connect values to action with a “that’s why” statement: Just as Aesop’s fables end with a moral (“That’s why slow and steady wins the race”), the story a company or its leader tells about its values should link clearly to its actions. Is the action internal or external? What is its intended impact? A compelling rationale for the course of action helps to minimise the possibility that a good faith effort will be dismissed as a public relations stunt.

Use accountability and transparency as a means of establishing credibility and trust: Whether through voluntary disclosures or participation in networks that set benchmarks on a single issue, the ultimate goal of these efforts from a communication standpoint is to build credibility and trust with stakeholders. This is not limited to political and social issues. A review of annual reports over a couple of decades found that companies that explained failures in terms of “internal, controllable factors” had higher stock prices a year later than those that “pointed to external and uncontrollable factors.”

Adapted from Speaking Out: The New Rules of Business Leadership Communication by Matthew Kohut, published by Georgetown University Press.