May 31, 2023
MIT SMR Strategy Forum recently published an article featuring Timothy Simcoe, Professor of Strategy and Innovation, discussing whether companies should refrain from making political statements.
Two years ago, soccer organization UEFA attempted to opt out of taking a political stance — a decision that was itself decried as a political statement. In an MIT Sloan Management Review Strategy Forum, panelists responded to the statement: The diametric experiences of Disney and UEFA illustrate that firms should refrain from making political statements in support of particular stakeholders. Simcoe was one of the 7% of panelists who agreed that companies should refrain from making political statements. It has become an unwelcome yet unavoidable reality for some companies that they are under pressure to vote on activist shareholder proposals despite the risk of backlash from a multitude of stakeholders and observers.
Simcoe states, “The lesson is not to avoid things that might be unavoidable but to think ahead and develop a clear set of values to guide managers’ actions and statements in those circumstances.”