When corporations become political

Open this photo in gallery:

Andrew Stark is a professor of strategic management at the University of Toronto.

At year’s end, it’s worth reflecting on the most unsung revolution of our time: the steady conversion of the corporation from an economic institution into a political one. All of its major stakeholders – consumers, employees, investors, suppliers – now routinely use the corporation as a mallet to hammer each other on political issues.

Consumers confront employees, such as when, this past fall, consumer boycotts threatened companies that failed to fire employees for posting anti-Charlie Kirk messages. Employees, for their part, take on consumers. In July, a Cisco employee publicly resigned because the company was selling technology to the Israeli military. That employee wasn’t taking on their employer, they were taking a stance targeting their employer’s customer.

It goes on and on. In recent years, suppliers have confronted consumers: vendors such as Amazon, Apple and Google refused to supply cloud services to platforms like Parler because of their use by extremist customers. Consumers have taken on suppliers: customers petitioned Whole Foods to drop Eden Foods as a supplier because of Eden’s anti-abortion stance. And investors have gone after consumers. Over the past little while, religious institutions have used their shareholder status in banks such as JPMorgan Chase, Barclays, and HSBC to pressure them into terminating financing for fossil-fuel companies. While this could be seen as an investor targeting a corporation, in the end their actual targets were other customers of the corporation.

Whichever stakeholders you choose – suppliers, investors, consumers or employees – you can find instances when they have picked a fight with each of the others. This is something relatively new. It’s true that stakeholders have for a long time taken on the corporation itself as their political opponent: recall the disinvestment campaigns launched against companies that did business in apartheid-era South Africa. Or, more recently, think of the boycotts that conservative consumers launched against Disney in 2022 for criticizing Florida’s “Don’t Say Gay” law.

But we’ve gone beyond that. Stakeholders are now contesting each other directly with each other, using the corporation as a mere playing field.

Many of the most prominent recent cases involve American corporations. But since great numbers of us outside America are consumers, investors, employees or suppliers of American corporations, we too have an interest in finding some clarity in this whirling kaleidoscope of political conflicts that surround the U.S. corporation – conflicts that certainly cause pain all around. Is the political use of the corporation justified? If so, how?

Open this photo in gallery:

One basic complaint is that a stakeholder’s freedom of monetary expression – their freedom to use their money to support only those causes they endorse – is allegedly being violated whenever their hard-earned dollars wind up in the pocket of another stakeholder whose political views they oppose.

Think of consumers paying for a product, only to discover that the money they’ve handed over to the company is going, in part, to pay the salary of an employee whose articulating views they dislike. Money, it is said, is speech. When a person’s money – or their labour, or other commodities – goes toward subsidizing a political stance, it’s a way of expressing their agreement with it. And so stakeholders shouldn’t have to discover that the money they’ve transferred to the corporation has actually been used, by another stakeholder, for political purposes they find objectionable. It would be a violation of their freedom of monetary expression. It’s unwarranted, in this view, for corporations to use what tech commentator Zack Whittaker calls even a “fraction of the profit” they earn from a consumer for a cause the consumer opposes.

It’s true that some recent – and not so recent – controversies do involve this kind of co-opted monetary expression. Between 2020 and 2022, for example, many of Nike’s institutional investors pressured the company to terminate suppliers in China that were allegedly using forced labour. This was indeed a case where investors’ own money, the capital they provided the company, had been going directly toward funding a practice they opposed politically and morally.

Nike Canada faces federal probe over allegations it uses forced Uyghur labour in China

Likewise when advertisers such as Disney and Verizon threatened to boycott Facebook unless it clamped down on online hate speech: they didn’t want the money they paid Facebook, as consumers of its advertising services, to support a platform that magnified objectionable views. But tune in a little more closely to the current cacophony of cases, and you will discover that very often a stakeholder’s money is not going to support views they oppose. It’s going to support a person with views they oppose. And that makes all the difference.

In 2018, Nike investors pressed the company to terminate its ad campaign featuring Colin Kaepernick, the football player who had protested police conduct by taking a knee during the singing of the U.S. national anthem. Here, investor funds were being used to purchase not a politically objectionable commodity, such as shirts and shoes made with child labour – which Nike has been accused in the past of using – but a politically innocuous commodity, Mr. Kaepernick’s Nike ad. There was nothing in the ad itself that investors found politically objectionable. Instead, it was simply generating income for Mr. Kaepernick, who himself was then engaging in the conduct – taking a knee – that investors found politically objectionable wholly outside of anything he did for Nike.

What’s more, while investor funds might have comprised part of the income that Mr. Kaepernick earned, he required none of that money to express his views. Mr. Kaepernick expressed his views in the good old-fashioned way that leaves money behind: the kind that relies merely on voice or gesture. Investors’ funds, then, were not in any way being used to support a political view with which they disagreed. They had no cause to complain that their freedom of monetary expression was being violated.

Open this photo in gallery:

Many recent cases resemble the Kaepernick controversy: consider one from the opposite end of the political spectrum, where the target was not a Black Lives Matter advocate but a MAGA enthusiast.

In 2020, some consumers of Goya Foods launched a boycott when company president Robert Unanue voiced his support for Donald Trump. But Mr. Unanue was not hijacking consumers’ monetary expression here, diverting it into a cause they opposed. Their money went simply toward the purchase of Goya’s commodities, such as a can of beans, which are bereft of any political resonance. And while some of the money consumers paid to Goya was then used to pay Mr. Unanue’s salary, Mr. Unanue did not need it or use it to express his endorsement of Mr. Trump. He was engaged in a costless form of political speech: he said stuff.

Money from Goya’s consumers might have helped support a person – namely Mr. Unanue – whose views many Goya consumers found objectionable, but it did not support the expression of those views itself. A boycott, then, wouldn’t have prevented consumers’ money from funding a political stance they disliked because, in fact, it wasn’t doing so in the first place.

Goya’s consumers, though, still might have had another objection. Perhaps it wasn’t their freedom of monetary expression but their freedom of “expressive association,” as legal scholars call it, that was somehow being hijacked by Mr. Unanue.

Even if their money wasn’t being used to support Mr. Unanue’s pro-Trump view, they were still associated with that view via their status as Goya consumers. After all, when we allow ourselves to be associated with a view it is generally taken to mean we endorse it, and so when companies or stakeholders with whom we have associations take views we disagree with, our approval is being co-opted. To eliminate any possibility that their willingness to associate with Goya might have been seen as approval of Mr. Unanue’s views, anti-Trump consumers had to stop buying the company’s products.

But it’s hard to actually pin down this associational grievance. Consider deep bonds of association, such as ties of friendship. We don’t associate the political views of friends with each other, no matter how close they might be. The conservative thinker William F. Buckley, Jr. was great friends with the liberal John Kenneth Galbraith, but no one thought that by virtue of their friendship each was endorsing the other’s views.

The associations we develop in the marketplace – employer-employee, investor-corporation, consumer-vendor – are attachments even thinner than friendships. Unlike friendship, a marketplace association can be broken at any moment for countless reasons: an employee discovers a better job opportunity elsewhere, for example, or an investor needs cash and so sells his shares. Given the tenuousness of such connections, was anyone really associating Mr. Unanue’s political views with Goya consumers just because they tossed a can of Goya beans in their shopping carts? The relationship is too attenuated.

And yet there are occasions on which marketplace associations can politically implicate us, thin as they might be. In 2020, Blake Neff, an employee of Fox, resigned after the company discovered that he’d been posting what Fox called “horrific racist, misogynistic, and homophobic” comments on an online forum. Postings like Mr. Neff’s don’t simply articulate a political viewpoint. They colour the person who voices them, tainting his moral character. In severing ties with such an individual, a company isn’t just dissociating itself from a view that no one attributed to it anyway, but from a person himself who had become offensive to it. Similarly in 2018, Papa John’s Pizza ousted its founder and chairman John Schnatter after he used a racial slur and made other racist comments during a media training phone session. In such cases, the question genuinely arises as to how we can associate with a person who holds those views, even if no one would ever associate us with those views themselves. Whether it’s a consumer, investor, supplier, or employee – or the corporation itself – they are justified in taking action to break the association.

Papa John’s pulling founder John Schnatter from marketing amid fallout over racial slur

Out of the political melee swirling around stakeholders, a couple of principles do emerge to tell us when our engagement with the corporation does – and does not – violate our expressive freedom. It’s violated when we find our money supporting views we deem objectionable, and not simply a person we disagree with. And it’s violated when we find ourselves associating with a person we deem objectionable, and not simply with views we disagree with. In either case we are justified in taking action to protect our expressive freedom.

So what, then, are stakeholders doing in cases like that of Messrs. Kaepernick and Unanue, if they are not asserting their expressive rights? Answer: They are engaging not in political expression but in political warfare. Goya’s consumers were hoping to coerce Mr. Unanue into stifling his own expression or to punish him if he chose not to do so; Nike’s investors, too, were trying to coerce and punish Mr. Kaepernick. Coercion and punishment are tools of war. They involve the deliberate infliction of pain on others – loss of jobs, loss of investment, loss of business – simply because of their political views. As a boycott leader in the Charlie Kirk case frankly declared: “This is war.”

Perhaps there are occasions when using the marketplace equivalent of the instruments of war, of coercion and punishment, are appropriate. When Airbnb cut off customers who had been involved in the Jan. 6 insurrection, it was marshalling economic force to fight those who had deployed physical force. Airbnb was engaging an issue that had already gone beyond the limits of political expression, indeed, into the use of violence. Likewise, when we Canadians boycott American products, we are properly responding combatively in a trade war we didn’t start.

But going forward into the new year, we should at the very least be aware of what we are doing in cases like Mr. Kaepernick’s, Mr. Unanue’s, or many of those surrounding Charlie Kirk. Each time we boycott a company because we oppose the political views of an employee, or pull out our investment because of the political beliefs of a supplier, or cease to supply it because of the political stance of a consumer, we move the corporation beyond being even a stage for politics. We convert it into something far more troubling: a theatre for the moral equivalent of war.