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Monday, April 07, 2014

Eich and the Politicization of the Corporation

Just a brief word on the (forced) resignation of Mozilla CEO Brendan Eich because of his Prop 8 donations: welcome to the continuing politicization of the corporation.  If corporations have speech protections and can play an active role in ideological debates of all stripes, then it matters if the CEO takes a different political position than the majority of stakeholders in the enterprise.  The CEO controls the company and speaks for the company.  So it is not suprising that stakeholders would be concerned about a CEO that did not reflect their values.

I think we're entering interesting and perhaps dangerous territory here as corporations take on First Amendment roles beyond their core business.  Corporations will always be associated with "core concern" speech directly related to the company's products and services.  But there is no need for "symbolic" speech that is unrelated to the business.  As I discussed at the Glom with regard to the Chick-fil-A controversy, gay marriage has little to do with delicious chicken sandwiches.  It is needlessly entangling of commerce and politics to make the purchase of a sandwich into a political act, especially when many participants in the enterprise have no interest in fomenting such a debate.  But those lines are blurring.  So Chick-fil-A begat the Eich resignation, because Mozilla customers and employees did not want their association with the company to end up labeled as support for limitations on gay marriage.

And that's the concern with Hobby Lobby, too -- if the court upholds First Amendment religion clause rights for a private, for-profit corporation, those who control the corporation will control its religion, too.  That means whatever ideologically-charged positions the controllers choose to take, the rest of the participants will be dragged along as well.  And that will make the corporation even more of an ideological battlefield.

Posted by Matt Bodie on April 7, 2014 at 12:29 PM in Corporate, Current Affairs | Permalink

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Comments

I think this is right Matt.

Posted by: Tamara Piety | Apr 7, 2014 8:34:22 PM

There's some artful drafting in this post, but the fact of the matter is that Mozilla is the wholly owned subsidiary of a non-profit, with a charter that calls for a public mission rather than private benefit. It's also highly dependent of volunteer labor which makes up the bulk of its workforce. While the same arguments may be adaptable from Chick-fil-a to mozilla it's certainly not automatic. In particular the most relevant stakeholders in Eich's downfall were those volunteers. When you pay in ideals, is it any wonder that you get idealists?

Posted by: Brad | Apr 7, 2014 10:55:18 PM

You previously have written that corporate social responsibility efforts "should be based on what the company actually does -- not the unrelated views of one of its owners or executives." (Matt Bodie, CSR: Substantive Versus Symbolic, The Conglomerate, Aug. 16, 2012) This seems inconsistent with the position that "The CEO controls the company and speaks for the company. So it is not suprising that stakeholders would be concerned about a CEO that did not reflect their values." How do you reconcile these claims?

Given that corporate speech was not at issue with respect to Eich (who made the offending political contribution years before becoming CEO and made a statement distinguishing his private speech from his role of CEO), it seems dubious to conclude that "Chick-fil-A begat the Eich resignation, because Mozilla customers and employees did not want their association with the company to end up labeled as support for limitations on gay marriage." If consumers and others cannot distinguish between the private acts of corporate officers taken outside their corporate roles and the quasi-official positions staked out by privately held/closely owned corporations that explcitly regard their identity as Christian in some sense (like Hobby Lobby), is the issue really politicization of corporations due to corporate speech?

Posted by: Curmudgeonly Ex-Clerk | Apr 9, 2014 3:28:50 AM

C E-C:

I reconcile the claims because one is a "should" and one is an "is." Companies should focus their expressive activity either on their own businesses or on noncontroversial charitable activity. But companies haven't always done that -- Chick-fil-A is an example. So employees, customers, and other stakeholders are rightly concerned that their company will be dragooned into supporting an unrelated, controversial cause because of the views of the owners or executives who control the company.

I do agree that folks like Eich may not intend on using their corporate perch to support their own personal political or ideological beliefs. But when companies like Chick-fil-A and Hobby Lobby have done so, then stakeholders have to worry that others will follow suit. When you give corporations religious and speech-related rights, and when owners/executives have the right to control those positions, stakeholders will be more vigilant to police the views of those who assume those positions.

Posted by: Matt Bodie | Apr 9, 2014 11:40:49 AM

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