Risky business: Taking a stand on social issues

When company executives take a stand on social issues, the repercussions can be significant. Not only does the company run the risk of alienating employees, but taking a stand on a controversial issue can impact the company's image and ultimately consumer purchasing behaviors. However, research on corporate social responsibility generally supports the notion that when companies get involved in societal issues, it can positively influence bottom-line financial performance. This article evaluates the advantages and disadvantages of taking a corporate stand on sensitive social issues and suggests guidelines that leaders should consider to increase the probability of success. Specifically, we found that oftentimes it is not the stand a leader takes but rather how that leader takes that stand. Moreover, we encourage business leaders to consider the delicate balance between fiduciary responsibility and social activism, to use a strategic approach, and to understand the legal repercussions before taking a stand on a social issue.