When the CEO should take a stance

The boundary between business and politics is increasingly blurred. CEOs no longer have the luxury of staying silent on hot topics and waiting to see how things play out – they are expected to express an opinion. David Bach, Rio Tinto Chair for Stakeholder Engagement and Professor of Strategy and Political Economy at IMD, explains how leaders can speak up effectively.

When it comes to politics, the traditional advice to CEOs is unequivocal: unless it is a topic directly relevant to your business, stay out of it. The leader of a pharmaceutical company might have voiced an opinion on patent regulation or R&D subsidies but would have been firmly counselled to stay away from questions around race, gender equity, immigration, and any other potentially sensitive areas.  

This conservative line of advice no longer applies. CEOs are increasingly expected to take a stance on a broad range of political questions – often questions that seem to not have any direct bearing on their business. Today’s leaders need to have a firm grasp of what is now required of them in terms of public statements, including when and how to comment on a given issue.   

Looking to the CEO for answers 

There are good reasons why CEOs have been reluctant to address political issues publicly. For one, most have attained the CEO position owing to their capability in the business arena, rather than a flair for public speaking or political debate. When many of today’s senior leaders were working their way up the career ladder, such skills would never have been expected of them, nor would anyone have been particularly interested in the political opinions of business leaders. Consequently, many haven’t developed the requisite capabilities.