17 November, 2023
Building on the theme of corporate activism, the concept of Corporate Political Responsibility (CPR) is rapidly gaining traction in the United States and beyond. CPR focuses on businesses’ external engagement on social and cultural issues, and current affairs, through public statements, advocacy, and donations. At its core, companies are encouraged to take a non-partisan, principled and systematic approach to weigh up whether and how to engage on these topics, and enhance their social and environmental sustainability by doing so.
Although historically arguments against business engaging in political (with a small “p”) debates have prevailed, business is as much a part of these debates as any other organisation, and employees, investors and customers are increasingly calling for companies to speak out on political issues. This has come at a time of polarised, complex and dynamic issues, such as the Israel-Hamas war (see our previous Friday 5 on this). A temptation for business may be to say nothing to avoid criticism; however, saying nothing, while sometimes wise, can alienate stakeholders and expose organisations to financial and reputational risks.
Companies therefore need frameworks and guidelines to navigate these challenging times and exercise more consistency and responsibility in their statements on social and cultural issues. This is where CPR comes into play. The University of Michigan’s Erb Institute proposes a series of four principles – legitimacy, accountability, responsibility, and transparency – to help companies better align their engagement on such topics with their purpose and values. These principles, which share much in common with the decision-making rubric we shared in our Israel-Hamas post, have been widely adopted by corporate America.
We’re all for the overall aim: moving away from a reactionary approach to individual issues, towards a more coherent and proactive engagement in the political arena, where companies make considered choices about when and where to engage, and do so meaningfully.
By Charlotte Pounder