CEOs can’t succeed if U.S. politics are broken. Here are 4 ways … – Yahoo Finance

September 2, 2023

Good morning.

I’ve saved the question on U.S. politics (see Five Questions here) for last. I know some CEO Daily readers would prefer I avoid it altogether. Today, business has no home in either political party. The Republican right has declared war on “woke” corporations that adopt the kinds of climate and diversity policies that have become table stakes in today’s talent-driven business world—witness the woes of Disney, AB Inbev, and Target. Meanwhile, the Democratic left has turned away from business, deeming profits as dirty and favoring regulation to excess. No wonder most CEOs prefer to stay out. But politics and its byproducts can’t be ignored any more than technology or geopolitics or climate change. Harvard’s Michael Porter was right six years ago when he wrote in Fortune that a dysfunctional political system is the single biggest threat to U.S. competitiveness. In the long run, companies can’t thrive in a country whose politics are broken.

So how to engage? Well first, encourage employees to participate and vote. Second, support politicians in the center; they need it. Any business leader who cares about the future of capitalism these days should be a raging centrist. Third, consider backing non-partisan efforts to empower the majority—like the “final five” voting used in the last election in Alaska. Most importantly, do the hard work in advance to define your company’s values—the things you are willing to stand up and fight for. If there’s one clear lesson from the problems that pummeled Disney and AB Inbev, it’s that vacillation is the worst solution. With a bruising political year ahead, companies need to know in advance where they are willing to make a stand. If you wait until the crisis comes, it’s too late.

I’m sure some readers will ask about the “No Labels” campaign to run a third-party candidate for president. On that effort, I’m inclined to agree with Bill Galston, who helped found No Labels but has since left in disagreement with the group’s plans to run a third-party candidate. The odds such an effort can succeed are minimal; the odds that it throws the election to the passionate minority are not.

Democratic Sen. Mark Warner of Virginia, one of the rare centrists in Congress, as well as an experienced panel of political experts, will join the Fortune CEO Initiative in D.C. Oct. 3 to give their advice on how companies should navigate these shoals. You can get more information on the initiative here.

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