How to Talk to the Board About Taking Action on Societal Issues
Article originally published on Gartner.com. The archived document can be accessed here with a Gartner account.
CHROs should regularly talk with the board about the risks and benefits of taking a stand on societal issues and the value of having a framework to guide these decisions. This research will help you prepare for these board conversations.
Overview
Key Findings
Taking action on societal issues is an important aspect of an organization’s employee value proposition: 30% of employees say their political beliefs influence where they want to work.
Audiences — including employees, consumers and other stakeholders — respond positively to organizations that take action but respond negatively when they feel the message is inauthentic or don’t see tangible results.
Developing a framework for effectively addressing societal issues, in collaboration with the board and other leaders, enables the organization to act consistently, authentically and proactively when those issues arise.
Organizational leaders, including board members, bear personal responsibility for representing the organization’s values and stances on societal issues due to their visibility internally and externally.
Recommendations
CHROs preparing to discuss taking action on societal issues with the board should:
Share the potential pitfalls associated with taking action on societal issues and evaluate past actions the organization has taken to identify successes and areas for growth.
Communicate organizational and stakeholder values. Identify and share with the board which societal issues the organization’s consumers and employees value most using metrics such as customer purchases, customer personal and public advocacy, customer investment, employment applications and internal turnover.
Implement a framework for addressing societal issues that is consistent and aligns with the organization’s values, soliciting feedback from the board and other leaders. As you develop this framework, consider an array of options for taking action and tailor them to specific situations.
Communicate personal leadership responsibility clearly and take steps to improve leadership’s ability to represent the organization well.
Introduction
Over the past few years, organizational stances on divisive social issues such as racial justice, reproductive rights and climate change have faced widespread public scrutiny. With some of these issues fading from media headlines — or being replaced by other issues — organizations may believe they no longer need a plan for speaking out.
However, a company’s social positions still have a significant influence on talent and business outcomes. For instance, 30% of employees surveyed in the 2022 Gartner H2 U.S. Employee Sentiment Survey say their political beliefs influence where they want to work.1 Sixty-four percent of employees surveyed by JobSage believe that it is important for employers to take a stand on social issues.2 Consumers agree: The 2022 Gartner Consumer Values and Lifestyle Survey indicates that 51% of respondents agree business should take the lead in solving key issues in our culture today.3 Further, the majority of respondents (65%) in a Lending Tree study are willing to pay extra for goods and services from a company that aligns with their personal values.4
As a result, CHROs should regularly talk with the board about the risks and benefits of taking a stand on societal issues and the value of having a framework to guide these decisions. These conversations will also help identify value-aligned, ongoing actions for implementing authentic change. CHROs are a natural fit to guide these conversations because of their unique insight into employee sentiment and their ability to represent the employee voice. Involve the CEO in preparing for and leading these conversations, as the CEO will ultimately be responsible for the organization’s response.
The next societal issue that sparks a national or global conversation will be hard to predict and organizations cannot risk responding poorly due to lack of planning. Developing a framework in advance for determining when and how to take a stand can help organizations act quickly and decisively when needed.
Analysis
Share the Potential Pitfalls and Benefits of Taking Action
To begin, identify and share potential pitfalls the organization may encounter in taking stands on societal issues with the board. For instance, consider the consequences of:
Inaction: Stakeholders often no longer view inaction as neutral but as a proactive choice not to engage. As a result, avoiding or delaying taking a stance can just as easily alienate stakeholders as taking a stance they disagree with.
Alienating stakeholders: Stakeholders demanding action will often disagree on what should be done. To reduce blowback, use metrics on employee and consumer sentiment to understand the opinions and desires of specific stakeholders. This information may reveal greater consensus than expected. While only 29% of employees surveyed in the 2022 Gartner H2 U.S. Employee Sentiment survey reported that their organization has taken an internal stance on a societal issue, the vast majority (75%) of employees whose organization did take a stance agreed with it.1
Inauthentic action: Responding to societal issues goes beyond crafting the right statement and requires consistent action to avoid the impression of inauthenticity. The survey also indicates that only 22% of employees surveyed believe their company has made a real effort to address important social/political issues they support rather than a superficial one.1 To ensure their words and actions appear sincere, continue to deliver tangible results on promises made, even in times of relative calm. Ensure stakeholders understand that the organization has followed through on its commitments.
A Discussion Plan for CHROs
To engage with the board on the risks and benefits of taking action on societal issues, take the following organization-specific steps to prepare for discussions:
Review past organizational statements and actions on societal issues to analyze successes and growth areas for the future.
Examine customer and employee metrics to identify stakeholder trends and behaviors on societal issues and demonstrate the value of taking stances on them. These metrics may include customer purchases, satisfaction surveys, or personal and public advocacy, as well as employee sentiment surveys, employment applications, and turnover.
Meet with the CEO and other leaders to understand their top concerns for addressing societal issues to present a full picture to the board.
Identify the top societal issues that are important to your organization and employees and provide specific examples to the board.
Communicate Organizational and Stakeholder Values
When talking with the board, highlight the importance of clearly stating the organization’s values to internal and external stakeholders and consistently aligning its stances on societal issues with those values. Clearly communicating these values is an important first step. If the board doesn’t understand what stakeholders care about, then the organization will struggle to credibly communicate how the actions it takes align with stakeholders’ values.
Next, suggest how the organization can best communicate these values back to stakeholders. Environmental, social and governance (ESG) reporting, for example, is a good way to communicate organizational values and demonstrate accountability in incorporating them into business strategy. ESG disclosures demonstrate an organization’s commitments by tying individual values, such as increased renewable energy usage, to overall business strategy and outcomes over the long term. The best organizations today incorporate ESG into their reporting through various metrics (see Figure 1).
Figure 1: Visual Representation of ESG Metrics
A Discussion Plan for CHROs
To shape discussions with the board on organizational values:
Review the organization’s values and solicit input on necessary changes.
Refer to metrics on employee and customer sentiment to ensure organizational values align with those of key stakeholders.
Analyze current ESG reporting and metrics to review whether they need to be updated to reflect the organization’s current values.
Review past external and internal communications to identify areas for improvement in effectively communicating the organization’s values to stakeholders.
Implement a Framework for Addressing Societal Issues
To effectively address societal issues, organizations need frameworks in place to guide their responses based on foundational principles and a repeatable decision-making process. Frameworks enable organizations to avoid acting inconsistently or inauthentically and address issues proactively.
Work with your team and broader organizational leadership, including the CEO and C-suite, to design a process that determines which societal issues to respond to and which stance to take. Ground the framework in organizational values and include diverse stakeholder input. Ensure the framework addresses the differences between longer-term issues and emergencies, providing guidance on timely communication on when a day or two is too long to wait to make a statement or to take action.
Then take the framework to board members for their review and approval to ensure it aligns with business objectives and long-term strategy. Board members will also need to understand their role in the ongoing execution of the process, which may include reviewing the framework annually to ensure continued alignment.
Case in Point: Societal Topics Decision Framework (Southwest Airlines)
To address emerging societal issues, Southwest Airlines created a standing committee that included representatives from communications, HR, legal, diversity and inclusion, community outreach, government affairs and investor relations. The purpose of this committee was to handle organizational response to issues on which key stakeholders might expect the company to weigh in. The committee meets monthly, as well as when activated, and members can activate the group if they notice an issue.
To come to a decision, the committee uses the societal topics discussion framework to surface key considerations for decision making, enabling sizing and comparison of impact for different audience groups. The questions within the framework raise contextual considerations (e.g., timing and source of pressure) and the potential impact of Southwest Airlines’ engagement on different audiences (e.g., customer reaction and government relationship impact).
The committee then creates a color-coded visual synthesis based on this information that highlights high-impact areas for them to consider when coming to a decision (see Figure 2). Based on the framework visualization and discussion, the committee then determines whether the situation requires immediate action, does not merit any action or should be escalated to the CEO for approval. This call is made by the senior-level executives on the committee.
Figure 2. Southwest Airlines’ Societal Topics Discussion Framework
A Discussion Plan for CHROs
To customize and strengthen your presentation on frameworks with the board:
Review existing societal issue decision-making frameworks or processes, if they exist, to identify weaknesses and areas for improvement.
Investigate similar decision-making frameworks at other organizations for best practices.
Meet with the CEO and other C-suite leaders to understand their perspective on the current decision-making process and its implications.
Identify key organizational stakeholders in taking action on societal issues and analyze their current role and possible future role in the decision-making framework.
Ensure the presentation includes a clear explanation of the board’s role in the decision-making process.
Consider an Array of Options for Taking Action
Once organizational leaders decide to take action on societal issues, they have a wide variety of options available to them to increase employee satisfaction, engagement and trust. Discuss possible actions to take with the board to generate additional ideas and to receive their input on the proposed actions.
Tailor these actions to specific scenarios, taking into consideration a range of factors including the opinions of employees and the customer base, available organizational resources, and risks specific to the issue. Not all societal issues require intensive investments to address — implement low-cost, low-risk initiatives.
For example, voting initiatives require little investment. Many organizations spread awareness about upcoming elections and enable their employees to vote through voter registration drives, nonpartisan candidate information sharing and flexible work options on election days. Those organizations have received significant positive feedback from their employees. In the 2022 Gartner H2 U.S. Employee Sentiment Survey, employees surveyed indicated that only 35% of their organizations offered paid time off to vote. However, 61% of employees whose organizations did so were satisfied with the decision, while 48% of those whose organizations did not wish they had. Implementing this policy could be a quick win for your organization.1
A Discussion Plan for CHROs
To frame discussions with the board about the variety of actions it can take on societal issues:
Compile a list of past actions taken by the organization to inform decisions on actions that could or should be taken in the future.
Identify new potential types of action by examining actions taken by competitors and other organizations.
Discuss past actions taken on societal issues to generate ideas and analyze possible options for the future.
Communicate Personal Leadership Responsibility
As organizations work to take authentic, coordinated action on societal issues, their leaders, including board members, need to play an active role in messaging and personal actions. Due to their visibility and role representing the organization, any individual leader communicating messages misaligned with the organization’s decision on a societal issue, even unintentionally, can create distrust among stakeholders.
In your discussions with the board, clearly communicate the important role the board plays in publicly representing the organization and keeping other organizational leaders accountable via performance and compensation. The expectations and mechanisms of this accountability need to be clear to the board and other leaders.
A Discussion Plan for CHROs
When speaking with the board about leadership’s personal responsibility on societal issues:
Review recent statements by leadership, including the board, on societal issues to identify areas of growth.
Discuss opportunities for leadership coaching and investment to improve its skills on addressing societal issues.
Lead a discussion about how personal leadership on societal issues should affect performance and compensation of the C-suite.
Be at the forefront of helping your organizations address societal issues. Conversations with the board on this topic ensure that it understands the risks involved with action or inaction. Focus on success strategies for addressing societal issues to guide these conversations and to build toward a value-based structure for systematically addressing them.
Evidence
1 2022 Gartner H2 U.S. Employee Sentiment Survey. This survey was conducted to understand how contentious social and/or political events in the U.S. affect employee trust in their organization, trust in their co-workers, trust in their managers, and overall quality of employee experience. This research was conducted online in three waves between 2 September 2022 and 29 November 2022 and contains responses from at least 1,000 employees (per wave) in the United States, representing a variety of industries and functions.
2 Over 4 in 5 Gen Z Adults Want Companies to Take a Stand, JobSage.
3 2022 Gartner Consumer Values and Lifestyle Survey. The purpose of this survey was to understand consumer lifestyles and motivations. The research was conducted online in two parts from 25 July to 18 August 2022 among 10,078 respondents in the U.S. (4,019), Canada (1,007), China (1,011), India (1,029), France (1,003), the U.K. (1,008) and Germany (1,001). The first part of the survey included screening, demographic, sentiment, values and lifestyle questions. The second part included category-specific (e.g., money and spending, health, and beauty) questions. Respondents were required to be at least 15 years old. Disclaimer: Results of this survey do not represent global findings or the market as a whole, but reflect the sentiments of the respondents surveyed.
4 1 in 4 Americans Are Currently Boycotting a Product or Company, LendingTree.
