Corporations Should Emulate Harvard and Refrain from Political Statements

Harvard University's new policy limiting its public statements to matters directly related to its mission serves as a lesson for corporations that have engaged in controversial political controversies, leading to declining reputations and customer bases.

Harvard University's recent declaration to refrain from issuing public statements on matters unrelated to its core function should serve as a wake-up call for corporate America. Taking sides on contested public policy issues has proven detrimental to the reputation and financial performance of many companies.

Harvard's decision stems from the recognition that its primary role is to pursue truth through intellectual inquiry and debate, not to engage in political commentary. By limiting its statements to matters directly related to its mission, Harvard aims to avoid damaging its reputation and alienate potential students, faculty, and donors.

Corporations Should Emulate Harvard and Refrain from Political Statements

This approach is supported by public sentiment. Only 41% of Americans believe companies should comment on current events, and among Gen Z, that number only rises to 53%. By aligning themselves with nearly half of their potential customer base, corporations can mitigate the risk of alienating significant market segments.

Numerous corporations have experienced reputational and financial consequences after wading into political controversies. Disney's net favorability score plummeted after its feud with Governor Ron DeSantis over Florida's Parental Rights in Education Act. Bud Light sales have yet to recover after sponsoring transgender activist Dylan Mulvaney.

Corporations Should Emulate Harvard and Refrain from Political Statements

Some corporations have been influenced by the advice of experts like McKinsey and BlackRock, who advocate for companies to earn their "social license" by appeasing various stakeholders through public stances on issues unrelated to their core business. However, this approach has backfired for many companies.

Coinbase, a cryptocurrency exchange, provides an example of how Harvard's commitment can be applied to the corporate world. After employee pressure, CEO Brian Armstrong declared Coinbase a "mission-driven" company focused on its core business rather than broader societal issues. Despite initial criticism, Coinbase has prospered and become the largest U.S. crypto exchange.

Corporations Should Emulate Harvard and Refrain from Political Statements

Even Google, known for its progressive culture and open discourse, has shifted its stance on activism. After pro-Palestinian employees protested the company's contracts with Israel, Google fired them and issued a memo emphasizing that the workplace should be free from disruption and political debates.

Harvard's and Coinbase's examples demonstrate a growing public awareness of the risks associated with corporate activism. Companies that prioritize their core mission and refrain from controversial political statements are more likely to maintain their reputation and customer base.

Corporations Should Emulate Harvard and Refrain from Political Statements

By establishing a clear policy that limits public statements to matters directly related to their mission, corporations can avoid the pitfalls of political activism. This policy provides a framework for responding to future controversies and shields companies from criticism and backlash.

Harvard's new policy and the experiences of companies like Coinbase and Google indicate a shift in public opinion and corporate practice. By focusing on their core mission and avoiding political controversies, corporations can protect their reputation, attract a broader customer base, and ultimately enhance their profitability.

Corporations Should Emulate Harvard and Refrain from Political Statements