Disney CEO Bob Chapek has had a tough spring.
First, he upset a vocal portion of his workforce at Disney World by not publicly opposing Florida’s newly enacted (on March 29) “Parental Rights in Education Act.” (The opponents of this law term it the “Don’t Say Gay” law, because it forbids Florida public schools from teaching about such sensitive topics as sexual orientation and gender identity in kindergarten through third grade.)
Chapek’s initial instinct was correct. He should have refrained from stating an official corporate position about the Parental Rights in Education Act. The reason is simple: As the CEO of a publicly traded company, his primary responsibilities are to Disney’s customers, employees, and shareholders. If Disney were privately owned, then whoever owned it would have the prerogative to identify his or her company with whatever causes and public policies he or she wished—such is the privilege of ownership—but Chapek doesn’t own Disney (or rather, he owns only a minuscule percentage of it via however many shares of Disney stock he currently owns). As CEO of The Walt Disney Company, it’s questionable whether Chapek has the legal right to speak on behalf of the entire corporation on issues of public policy, and it’s certain that he doesn’t have the moral right to do so. Plus, it’s simply a bad business practice.
Here’s why:
Legally, Disney has a huge number of owners. It’s safe to say that those individuals (and remember, even the funds that own Disney stock own those shares on behalf of individuals) span the political spectrum. When it comes to a controversial policy, such as that adopted by the passage of the Parental Rights in Education Act, many shareholders are in favor of the law and many are opposed. It’s presumptuous for Chapek to speak on behalf of all the owners as if they all agree with his position. They most certainly do not. (It’s his right to articulate the objectives that Disney strives to achieve and the values that the corporation seeks to embody, and that should be the limit of his pronouncements about official corporate policies.)
Similarly, what right does a CEO have to stake out a corporate position that many of the company’s employees disagree with? Doing so creates an unfriendly work environment just as surely as would be the case if a CEO of a public corporation declared, “Our company supports the Democratic (or Republican) Party,” or “We favor Protestants over Catholics, Jews, atheists, et al.” A large corporation will naturally have a politically and religiously diverse workforce, and it should not favor one segment over the others. In this case, Chapek caved to a noisy segment of the company’s workers and adopted their position as the official position of the entire corporation when, in fact, such a position disrespects Disney employees who agree with the new law. It seems to have been a case of the proverbial squeaky wheel getting the grease.
Let me be clear that on issues like what children should be taught in public schools, each employee of the corporation, from the newest park cleaner to the most senior executive, should be free to publicly advocate whatever political goals they favor. But they should do so as individuals, using their own time and financial resources. The non-CEOs of the company should not have to endure the company CEO presuming to stake out an official corporate position on controversial political issues as if they were representing the views of every employee. A CEO taking divisive positions cannot be beneficial to workforce morale. It inevitably leaves one side disgruntled.
Finally, Disney’s customer base, being the largest group of people to whom Disney is accountable, is also the most diverse. Why risk antagonizing a portion of them by staking out an official corporate position on an issue that millions of customers or potential customers oppose? If Chapek and his fellow executives read the market as wanting more gay content in Disney movies, fine. Let them respond to market demands by altering their product lines. That is what successful businesses do. But CEOs shouldn’t array themselves against a portion of their customers by openly opposing them in the political realm. Many will forgive Disney and still take the kiddies on a vacation to the Magic Kingdom, but not all of them will.
Let’s hope that Chapek and other corporate CEOs remember to whom they’re accountable. If they adopt “woke” partisan positions on political issues, they risk alienating customers, dismaying employees, and jeopardizing the profits that shareholders hope for. The bottom line: CEOs should focus on serving all their constituencies impartially, and avoid getting embroiled in political skirmishes.
