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How to Make Your Corporate Activism Really Count

Kiely Kuligowski
Kiely Kuligowski

Token statements will land your business in trouble. How can your business walk the walk with meaningful corporate activism?

  • For meaningful corporate activism, businesses must support their words with actions, and make activism part of their company values.
  • Shareholder activism – when shareholders use their positions to influence charges – can lead to short-term financial gains for an organization.
  • Bandwagon activism is when people or businesses participate in a movement because it has become popular or feel it is expected of them.
  • This article is for people who want to learn about different types of corporate and shareholder activism and how to avoid bandwagon activism.

Advertising and social media marketing have developed into a nuanced and complicated entity, one where every step a brand makes is scrutinized. It's also become an enormous opportunity for brands to speak out about their values and develop a unique online identity.

But when enormous, divisive movements, like the racial inequality movement we are experiencing right now come up, brands have a choice to make: o they jump on the bandwagon and try to appease as many people as possible with a basic message, or do they commit to action behind the message?

What is corporate activism?

Corporate activism is something that occurs when businesses advocate for government policy change on social or moral issues. It is different from corporate social responsibility – for example, when Walmart stopped selling rifles, that would be regarded as corporate social responsibility, because the company distanced itself from the firearm industry.

But in 2019, after a mass shooting in a Walmart store, CEO Doug McMillon engaged in corporate activism when he called on lawmakers to enact stricter gun control measures.

And more recently, Amazon, Coca-Cola, Nike, Facebook, and Uber have pledged large donations to racial inequality and criminal justice reform advocacy groups, making them all participants in corporate activism.

Key takeaway: Corporate activism is when businesses advocate for government policy change on social or moral issues.

Examples of meaningful corporate activism

Many well-known companies have emerged as solid examples of meaningful corporate activism. Here are some that effectively demonstrate how you can support a cause while staying true to your company identity:

  • "I've been impressed by the response of Netflix," said Dan Bailey, president of WikiLawn. "It pushed Black-created content to the forefront of its site, making important works available to all. It also acquired a lot of work from Black creators recently. Its activism is helping people understand the movement."
  • Patagonia has been a longtime vocal supporter of environmental protection and preservation, including fighting against climate change and promoting a sustainable industry. It has built its advocacy into the fabric of its brand by featuring an 'Activism' tab on its website and paying a self-imposed "Earth Tax," where it donates 1% of its profits to environmental nonprofits around the world.

Key takeaway: Companies that do activism well support their words with action.

What is shareholder activism?

Shareholder activism is when shareholders attempt to use their influence as a shareholder of a publicly traded company to enact change within the organization. The changes can range from environmental or social concerns to issues with governance or profit distribution within the company.

Why is shareholder activism important?

Shareholder activism can serve as an effective monitoring tool that improves the efficiency of corporate governance, and has a positive impact on a company's performance and decision-making. If a company's leadership team is aware that shareholders are committed to using their rights to enact positive change in the company if needed, they are more likely to make those positive changes themselves.

Why is shareholder activism increasing?

Shareholder activism, as we know it today, began in the 1980s as a way to protect the financial interests of member investors, and has increased as shareholders realize that they hold the power to influence corporate behavior in a way that the shareholders believe will benefit the company.

A large reason behind the increase is the short-term boost that these efforts can have on stock prices. From 2001 to 2006, Thomson Financial studied the performance of 75 companies with activist shareholders and saw that in the first three months, their shares rose nearly 12%, which was much higher than the control group – whose stocks rose just 1.5%. After one year, these companies reported gains of 17% , compared to the control group's 7.2% gains.

Key takeaway: Shareholder activism is when shareholders use their positions to enact change within an organization. It can improve corporate governance and can have a positive short-term effect on stock prices.

What is bandwagon activism?

Ever since protests against police brutality and racial inequality erupted across the country, companies big and small have posted support on their websites, social media, and advertisements. Nike released a minute-long advertisement against racism with the hashtag #Don'tDoIt, and almost immediately, brand after brand released somber messages in white text on a black background, all saying some variation of the same thing: "We stand against racism," "We stand for inclusion," "It's time for change," and so on, which left many consumers feeling as though the words were empty and brands were posting them because they felt it was what was expected of them.

The "bandwagon effect" is a phenomenon where there is a high rate of adoption of beliefs, ideas, or support based on the sudden popularity of those beliefs or ideas. Therefore, bandwagon activism is when there is a sharp increase in brands and businesses taking part in social movements because support for those movements has increased in popularity.

"Think about companies that change to a rainbow logo June 1, immediately change back July 1, and do nothing for LGBT rights outside of the month of June," said Rex Freiberger, CEO of Gadget Review. "That's bandwagon activism."

Why is bandwagon activism not helpful in the long run?

The heart of activism is change, and to enact true change, you need to be fully committed. The issue with many bandwagoners is that they will post when it's trendy and appear to be committed to the cause, but when the time comes to vote for new policies, they don't show up.

It's like bandwagon sports fans – the ones who buy the jersey after the team wins the Superbowl but stop showing up after they lose a game – powerful and unifying at first, but disheartening after the initial momentum fades.

"Bandwagon activism is better than nothing. But from multiple perspectives – corporate image, building a brand, gaining a following of dedicated fans, being seen as a reliable ally and charity partner – it's far better to build a consistent interest, be seen as a company that really cares, and be there for the long term," said Shel Horowitz, marketing consultant and author at Going Beyond Sustainability.

Key takeaway: Bandwagon activism is when people or brands participate in a social movement only because it has become popular to do so. It isn't helpful in the long run, because it does nothing to create meaningful, long-lasting change.

How to make your corporate activism count

Bandwagon activism is an easy hole to slip into, especially with social media, which enables businesses to put forth minimal support for a cause in a highly visible way, without holding itself accountable to meaningful change.

Here are six ways your business can support a cause in a meaningful way:

  1. Look at your motivation for being involved. "Companies need to have a clear idea of why they're joining a particular cause," said Freiberger. "If it's just because it will look bad if they don't, that needs to be evaluated. It's far better to choose causes that align with the business rather than trying to force a square peg into a round hole."

  2. Be choosy about what you speak out about. It can feel like you are pressured to make a statement about many issues, but that is one of the most common ways to fall into bandwagon activism. Rather than making an empty statement, carefully choose issues that align with your company, and make sure that you are participating in the movement and making positive changes at your own company – like actively promoting diversity and fostering an inclusive environment – and focus your statements and efforts there.

  3. Make change in your organization before committing to a major movement. In the wake of the most recent Black Lives Matter movement, many companies have been called out for posting support of the movement but underpaying their Black employees or not hiring diverse talent. It's vital that you make internal changes in your company and ensure your business is on the right path before you speak out in support of a movement. "Change has to start from the inside," said Bailey. "It's not enough to tell your customers they should support a cause. You need to do the hard work in your own organization first."

    "Authentic allyship is ensuring that your organization is committed to the work," said Tammy Tsang, co-founder of AndHumanity, an inclusive communications agency. "That is ensuring that your leadership is on board and that there is a deep understanding of what it means to contribute to the solution. They have to be brave enough to look inward and ensure that they're not contradicting what they say they stand for."
  1. Be consistent about your causes. Many companies are silent about major issues such as racial inequality until it's in the news, then suddenly act as if it's new to them or that they've just been called to act on, which comes across as insincere. "Companies shouldn't have to be reminded to care about the world because of a trending hashtag, or once they've been called out, for not using their platform to speak up," said Kimberly Porter, CEO of Microedit Summit. "It should be something that happens all along." [Read related article: Diversion and Inclusion Strategies for Startups]
  1. Make change part of your company values. If you have created meaningful changes in your organization, the next challenge is making sure it lasts. The best way to this is to make it part of your company values and imbue this sense of change and action into everything you do. "That's the only true way to get it to last," said Freiberger. "Teach your employees and customers that it's important to you in everything you do, from hiring policies to the way you conduct business."
  1. Find other ways to lend your support. After your business has made internal changes to support a movement, seek other ways to provide support. This may be making financial donations to advocacy groups, charities, or politicians working to enact change for that cause, or even providing your employees with PTO to volunteer for those organizations or participate in peaceful protests. You can tailor your actions to fit your business – for example, many bookstores donated a portion of their profits from anti-racism books they sold to organizations like Black Lives Matter or the NAACP.

Key takeaway: To enact meaningful change in your business, commit yourself and your employees to doing the work, and make that commitment part of your company values.

Image Credit: bernardbodo / Getty Images
Kiely Kuligowski
Kiely Kuligowski
Business News Daily Staff
Kiely Kuligowski is a and Business News Daily writer and has written more than 200 B2B-related articles on topics designed to help small businesses market and grow their companies. Kiely spent hundreds of hours researching, analyzing and writing about the best marketing services for small businesses, including email marketing and text message marketing software. Additionally, Kiely writes on topics that help small business owners and entrepreneurs boost their social media engagement on platforms like Facebook, Twitter and Instagram.