CEOs' Dilemma: Supporting Trump's Agenda, Opposing His Behavior | KERA News

CEOs' Dilemma: Supporting Trump's Agenda, Opposing His Behavior

Aug 15, 2017
Originally published on August 16, 2017 12:40 pm

Under Armour founder and CEO Kevin Plank set off a social media firestorm last February when he voiced some overly positive words about the new administration of President Trump.

"To have such a pro-business president is something that's a real asset for this country. I think people should really grab that opportunity," said Plank, whose company makes sports apparel.

On Monday, Plank became the latest corporate CEO to publicly cut ties with the president, giving up his seat on a White House advisory council on manufacturing amid criticism over the president's response to the violence in Charlottesville, Va., last weekend.

"There is no place for racism or discrimination in this world," Plank said in a tweet.

Others quitting the council are Merck's Kenneth Frazier and Intel's Brian Krzanich. Scott Paul, president of the Alliance for American Manufacturing, an industry group, also announced his departure Tuesday, tweeting, "I'm resigning from the Manufacturing Jobs Initiative because it's the right thing for me to do."

And AFL-CIO President Richard Trumka also stepped down from the council.

"I think these leaders are waking up to the fact their continued silence in the face of mounting evidence of immorality is tantamount to consent," said Nicholas Pearce, clinical associate professor of management and organizations at Northwestern University's Kellogg School of Management.

The departures underscore the dilemma facing corporate chief executives at a highly polarized and partisan time, said David Ulrich, professor of business at the University of Michigan's Ross School of Business and a partner at the consulting firm RBL Group.

They may share Trump's pro-business agenda, but find it difficult to ignore his personal behavior, Ulrich said.

"How do you begin to manage the balance between the person and the policy? And I can imagine these CEOs are really struggling to find that right balance between those two things," Ulrich said.

He noted that corporations have a big stake in policy decisions being made right now, and giving up a seat at the table means having much less influence in Washington.

"It's pretty easy for a CEO to say, 'These are my values. You violated them.' But the CEOs who are smart know, 'Once I back out of that opportunity to shape policy, the voice that I could have had is now lost,' " he added.

Trump insisted Tuesday that he would have no trouble replacing the departed members of the advisory council and dismissed them as "grandstanders."

And some high-profile companies have said they are staying on the council.

"We must engage if we hope to change the world and those who lead it," said Alex Gorsky, chief executive of Johnson & Johnson, in a statement released Tuesday.

"Our commitment to diversity and inclusion is unwavering, and we will remain active champions for these efforts," said a spokesman for Campbell Soup CEO Denise Morrison.

The decision to leave is harder for some companies than others.

Among those staying on the council are the CEOs of several major companies that have substantial federal government contracts, including Lockheed Martin and United Technologies.

Given Trump's tendency to hit back hard against anyone who crosses him, such companies may be especially reluctant to anger the White House.

"In this environment, it's easier for an executive to release a boilerplate statement condemning hatred than it is to open him or herself or their company up to the president's Twitter-ranting," Pearce said.

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AUDIE CORNISH, HOST:

Today President Trump tried to keep his business agenda on track. He signed an executive order to speed up the permitting of highways and bridges.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT DONALD TRUMP: We will rebuild our country with American workers, American iron, American aluminum, American steel.

CORNISH: But also today, more members of a White House council on manufacturing said they were stepping down after observing President Trump's response to the violence in Charlottesville, Va. NPR's Jim Zarroli has more.

JIM ZARROLI, BYLINE: Last February, Kevin Plank, the head of the clothing company Under Armour, generated a social media firestorm because of an appearance he made on CNBC. Plank's offense was to speak a little too enthusiastically about President Trump.

(SOUNDBITE OF ARCHIVED RECORDING)

KEVIN PLANK: I think he's highly passionate. He definitely is - you know, to have such a pro-business president is something that's a real asset for this country. I think people should really grab that opportunity.

ZARROLI: Yesterday, Plank joined the growing ranks of corporate leaders who are publicly cutting ties with Trump following his tepid statements about the Charlottesville violence this weekend. Plank stepped down from a White House advisory council on manufacturing. He said there is no place for racism and discrimination in this world. He follows the CEOs of Merck and Intel out the door. Nicholas Pearce is an associate professor of management at Northwestern's Kellogg School.

NICHOLAS PEARCE: I think these leaders are waking up to the fact that their continued silence in the face of mounting evidence of immorality is tantamount to consent.

ZARROLI: The defection of these CEOs underscores the dilemma that corporations face in a highly polarized and partisan era. University of Michigan business administration professor David Ulrich says many CEOs share President Trump's agenda of deregulation and tax cuts and want it to succeed. But they increasingly find it difficult to ignore Trump's personal behavior.

DAVID ULRICH: How do you begin to manage the balance between the person and the policy? And I can imagine these CEOs are really struggling to find that right balance between those two things.

ZARROLI: Ulrich says the dilemma is all the more difficult for another reason. By publicly cutting ties with the White House, the CEOs are giving up a seat at the table.

ULRICH: It's pretty easy for a CEO to say, these are my values; you violated them. But the CEOs who are smart know, once I back out of that opportunity to shape policy, the voice that I could have had is now lost.

ZARROLI: And Trump said in a tweet today that he won't have any trouble replacing the CEOs who quit. Meanwhile, several other CEOs made clear they're staying on the White House council. Alex Gorsky of Johnson & Johnson said in a statement that the company has a responsibility to remain engaged, not to support any political agenda but to make sure its values are represented as crucial public policy is developed.

The events in Charlottesville point to another challenge facing corporations. Companies can't risk allowing racial tensions to fester in the workplace. Michael LeRoy of the University of Illinois at Champaign-Urbana says companies that do can face legal problems.

MICHAEL LEROY: I think you have to figure out who you are as an organization. And if you're going to tolerate that, then you're going to have to put up with litigation as to racial harassment and so forth.

ZARROLI: LeRoy says it's ultimately up to a top executive to set the right tone in the workplace and send a message that those kinds of tensions won't be tolerated. Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.