SHOULD I STAY OR SHOULD I GO
How Corporate Boards Became the Battlefield of the Trump Era
Progressive groups have been trying to turn CEOs against the president. After Charlottesville, they’re going in for the kill.
President Donald Trump’s manufacturing council is functionally useless. It’s done little but meet in an effort to promote the White House’s “Manufacturing Jobs Initiative.” But in the past few days it has become the epicenter of the political fallout stemming from Saturday’s domestic terrorism incident in Charlottesville.
The reason why says a lot: about Trump’s own political impulses, about the state of progressive activism, and about the growing distrust between the White House and a business community that once was modestly hopeful about its occupant.
The precipitating event was the president’s widely criticized, highly tepid response on Saturday to the violence that occurred at a white supremacist rally in Charlottesville. Following those remarks, Ken Frazier, the CEO of Merck Pharmaceutical, said he was departing the council out of a moral compulsion to do so.
The fallout may very well have ended there, but Trump subsequently took to Twitter to criticize Frazier in ways far more direct than he had done with the neo-Nazis.
Instead of patching up matters, he inflamed it, putting the spotlight squarely on the remaining 23 council members to see if they’d follow Frazier’s lead. The Daily Beast reached out to each member. Many denounced the bigotry and violence from the weekend but said they’d remain on the council to represent their company and industry’s interests. But others did depart, including the CEOs for UnderArmour and Intel, the head of the Alliance for American Manufacturing, and Richard Trumka, the president of the labor federation AFL-CIO.
Perhaps each of these individuals would have left the council regardless of Trump’s decision to target Frazier. But the president did little to incentivize them to stay. Instead, he reacted with more Twitter pique by insisting that he’d find others to replace them, angering business leaders beyond the council members. By Tuesday afternoon, Walmart’s CEO, the largest private employer in America, declared that Trump “missed a critical opportunity” to unite America.
Trump may very well roll his eyes at these criticisms. On Wednesday he insisted that it was all because he’d been so tough on companies that had shipped jobs overseas.
But his handling of the Charlottesville incident highlighted an absence of political nuance. The instinctual vitriol he has for his critics has only widened a schism between cultural conservatives and corporate America. And it’s done so in a way that’s given Democrats a rare bit of leverage.
For years, progressive activists have looked towards corporate actors as a means of facilitating legislative and cultural change. Companies have been targeted in campaigns to promote wage equality, sexual assault awareness, and LGBT rights.
The most memorable efforts have been state-based, including a sustained push to overturn a religious freedom law in Indiana that would have potentially shepherded in anti-gay discrimination; and the campaign in North Carolina to overturn that state’s anti-transgender bathroom bill. But it’s also worked nationally too. Reebok shoes, which was shamed into dropping its relationship with Hip-hop artist Rick Ross over lyrics that alluded to rape, has adopted a notably progressive social media presence recently, mocking Trump over his treatment of the French President’s wife.
In each of those instances, traditionally apolitical corporations felt compelled to apply pressure on lawmakers. But it was progressive activism that leveraged the consumer opinion that prompted those corporations to exert that pressure.
“What is really interesting about the last couple years, our current situation notwithstanding, is that corporations have taken on a conscious strategy to out progressive each other in terms of their public-facing brand,” said Nita Chaudhary, founder of UltraViolet, a progressive feminist group which has been involved in its fair share of corporate accountability campaigns. “That is not to say that they are progressive internally with their values. But they’ve come up with this idea that progressive values sell.”
As a cosmopolitan who hails from the business world, Trump certainly knew this; or, at least, should have. But the calculation he made, at least subconsciously, was that the business community’s appetite for tax cuts and regulatory reform would outweigh the discomfort it had with his sharp-elbowed, nationalist brand of politics.
To a certain extent, he’s been right. Though other companies have departed the manufacturing council over Trump’s approach to climate change, most notably Tesla’s Elon Musk, the majority remain in place. Just minutes after a press conference on Wednesday, in which Trump once again equivocated on denouncing neo-Nazism, several CEOs expressed shock and disappointment but pledged to stay put.
“We find the events of this past weekend in Charlottesville to be incredibly troubling. There is simply no place in our society for racism of any kind, white supremacy, or Neo-Nazism,” said Michael Polk, CEO of Newell Brands. He added: “With a large portion of our business in the U.S., including a manufacturing footprint of more than 60 factories and 15,000 employees (and counting), it is in our best interests to have a voice in the conversations that can influence the environment in which we work.”
Polk isn’t the only CEO to have determined that, in the age of Trump, it’s better to be at the table than on it. But in the aftermath of Charlottesville and Trump’s response to it, these choices come with a heightened cost.
Progressive activists are now openly encouraging corporate America to turn its back on Trump, not just because they want to hold the line on legitimizing the president’s comments but because they feel that CEOs are more amenable to their demands than, say, congressional Republicans. The manufacturing council itself may be a symbolic target. But the ability to influence and in some cases shame its members is seen as one of the few meaningful ways to impact the president himself.
“It is important precisely because it is symbolic. It is important for CEOs to leave Trump’s council precisely because of the symbolic importance of doing so,” said Shannon Coulter, the co-founder of the corporate accountability #GrabYourWallet movement. “These meetings, these councils are mostly dog and pony shows for him. And I don't think CEOs realize that for Trump it is first and foremost and perhaps almost exclusively about the photo opp and the legitimacy lent to his administration when he gets these people in the room with him. His already bloated ego gets a huge boost from that.”
UPDATE: Hours after this article posted, the president's manufacturing council disbanded.