BiGS Actionable Intelligence: When business leaders are deciding whether to jump into addressing societal issues—with words or deeds—they need to weigh two things: whether and how to act. A new report from a Harvard Business School institute lays out approaches for prioritizing those issues and a roadmap for how to appropriately engage and plan for the impact on stakeholders.

As racial and gender inequality, climate change, and other societal challenges grab the attention of companies and their stakeholders, leaders are expected to engage while taking care to be thoughtful about what they tackle and how. And it’s not easy.

To help clarify how leaders can respond, Harvard Business School’s Institute for the Study of Business in Global Society (BiGS) last October convened Midwestern business and nonprofit leaders in Detroit. During the day-long event, faculty engaged with the leaders to unlock insights and identify a path forward. BiGS captured findings in its exclusive roundtable report, “Doing Business in a Divided World: A Guide for Leaders.”

“Society is expecting business to be more involved,” Professor Debora Spar, HBS senior associate dean for business in global society, told the roundtable participants. “We are past the hand-waving stage... If we want business to play a more active role tackling societal challenges, how do we do that?”

High level of trust in employers over other institutions

And why? Data from the most recent Edelman Trust Barometer found that people trusted their employer more than business in general, and that people trusted business more than NGOs, government, and media. 76% of workers trust their employer—a full 32 percentage points more than the average of the other three institutions. Companies should repay that trust by ensuring that their employees see their values expressed in how business gets done, according to the Edelman report.

Furthermore, the Edelman Trust Institute research showed that employees were up to 10.5 times more likely to work for an organization with a public commitment to issues such as human rights, racial justice, and climate change.

Leaders and their employees, however, often don’t see eye to eye on the issues. Only half of U.S. workers want their CEOs to take stances on societal issues, a figure that dropped 10 percentage points since 2022.

Framework for companies to decide whether to get involved

Vikram Gandhi, HBS senior lecturer of business administration, presented a framework for companies to weigh whether to get involved in issues. When hot issues arise, companies can do something, say something, neither—or both. And as many companies have recently learned, any decision has the potential to alienate investors, employees, customers or the public.

So, what is a CEO to do? Leaders were advised to match their approach to their company’s values. Hubert Joly, the former chairman and CEO of Best Buy who is now a senior lecturer of business administration at HBS, advises that before engaging, leaders examine factors such as:

  • Is the issue relevant to the company’s brand, values, purpose, customers or employees?
  • Does the company have legitimacy to get involved in the topic?
  • Is the company’s stance authentic and thoughtful, not just opportunistic?
  • Is there congruence between the company’s positions and actions?
  • What is the likely business impact of the company’s involvement?

As they look at those issues, leaders must look at the perspectives of others, such as employees and customers. Why? Because while a company may have authentic reasons to get involved, others may not see it that way.

HBS Professor Lynda Applegate says when weighing a statement or action, companies should do a stakeholder analysis, starting with a list of how it would affect everyone involved. Looking at each stakeholder’s expectations and potential reactions, companies should chart whether the company approach would be positive or negative to them, she advises. The stakeholders can be inside or outside the company. After weighing the importance of each stakeholder to accomplishing company goals, leaders should identify ways to clarify or realign those stakeholders’ interests and expectations.

As differences over politics increase, companies must navigate between a consistent enterprise-wide talent strategy and the needs of stakeholders in their local markets, Edelman’s report points out. Helpful strategies are clear communication, a focus on company values, and a careful analysis of possible actions to take.

Dig into the BiGS’ report here. And if you’d like to share your own experiences or thoughts on this important topic that BiGS will continue to examine, send an email to BiGS Editor-in-Chief Barbara DeLollis at bdelollis@hbs.edu.