CEOs should take a stand on social issues: Yale management guru

CEOs in addition to business leaders have a responsibility to take a stand on social issues, said Jeffrey Sonnenfeld, senior associate dean at Yale School of Management.

“There is actually a role for the leader to act as more than a convener although to actually take a position of conscience,” Sonnenfeld said Wednesday on CNBC’s “Power Lunch.”

He said “[business leaders] should get involved” to help prevent tragedies such as the mass shooting in Parkland, Florida, on Feb. 14 which killed 17 people.

Sonnenfeld was responding to a commentary from the completely new York Times written by CNBC co-anchor in addition to Times columnist Andrew Ross Sorkinon Monday regarding the role of businesses in curbing gun violence. Sorkin argued which financial companies such as Visa in addition to Mastercard should refuse to do business with gun retailers, such as Walmart. As a result, the stores might stop selling guns because they don’t want to be cut off coming from the credit card system, Sorkin reasoned.

“There’s a real opportunity for the business community to fill the void in addition to prove which all which talk about moral responsibility isn’t hollow,” Sorkin wrote.

Sonnenfeld agreed in addition to pointed out which the U.S. is actually only 5 percent of the entire world’s population although represents a third of the entire world’s public mass shootings.

“Something is actually wrong here,” Sonnenfeld said. “is actually there no limit to the artillery which we let someone have in their backyard?”

although Bill Simon, former U.S. Walmart CEO, said which approach is actually not realistic. While he called Sorkin’s piece “thoughtful,” he said the item was wiser — while firearms remain legal from the U.S. — to have reputable stores which can keep records of gun sales in addition to assist law enforcement.

“You want responsible retailers selling [guns] so they can be documented in addition to videotaped in addition to tracked,” Simon told CNBC on “Power Lunch”on Tuesday.

The responsibility, instead, lies with state in addition to federal legislators to improve the current gun laws, Simon said.

although Sonnenfeld called Simon’s rationale the “when-in-Rome argument.”

“You can set a higher standard as a business leader,” he said. “We’re not going to stop all murders. We’re not going to stop all thefts. People will still run out of a restaurant without paying. Does the item mean you don’t try to enforce the item? You try to enforce the item to the best of your ability, starting somewhere.”

Sonnenfeld said companies such as Apple in addition to Starbucks have adopted firm positions on social issues without asking for a majority vote by shareholders, as have individual leaders, such as Merck CEO Kenneth Frazier after the white nationalists’ rally in Charlottesville, Virginia, last summer.

“in addition to they’ve survived just fine,” Sonnenfeld said.

If the item’s a privately owned company, he pointed out, taking a side is actually easier. although for public companies, the situation gets tricky.

Businesses risk alienating customers if they take a side, said Steve Odland, CEO of the nonprofit Committee for Economic Development.

“Customers, employees, owners, communities are all split on these issues,” Odland said on CNBC’s “Closing Bell” on Tuesday.

Some companies do experience boycotts, Sonnenfeld said. “in addition to they weather them fine.” He pointed out which customers can choose to boycott a business for not taking a stand. He said taking a stance on an issue can help reinforce the company’s corporate brand.

A representative for Visa said the company acts as a payment processor in addition to does not have a direct relationship with its merchants.

In a statement, Mastercard said, “Our payments network is actually governed by standards which have been established over time. Chief among these is actually which we do not in addition to will not permit merchants to engage in unlawful activity on our network. When we’re made aware of any illegal activity or violations of our rules, we work with law enforcement in addition to merchants’ banks to shut down those efforts.”

Walmart did not respond to a request for comment.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

5 × 4 =