Listen to the podcast:
The violent attack on the U.S. Capitol on January 6 was a “watershed moment” for businesses, forcing many to reconsider their civic responsibilities alongside their corporate values, Wharton management professor Michael Useem said.
Several companies set aside profits in their decisions immediately following the deadly riot, when thousands of Donald Trump supporters stormed the capitol to stop Congress from certifying the election of Joe Biden as the 46th president. Twitter lost a reported $5 billion in market value after taking Trump permanently off its platform. Delta, United, American and Southwest airlines temporarily banned firearms on all flights to Washington, D.C. And vacation rental site Airbnb blocked and canceled all reservations in the metro area for inauguration week.
Those decisions show how companies are stepping up to “make a difference where they can make a difference,” Useem said during an interview with the Wharton Business Daily radio show on Sirius XM. (Listen to the podcast above.) “What’s really significant here is these kinds of actions weren’t commonly seen at all, but now they have become widespread in the wake of the events of January 6. So, it’s a watershed.”
“This is one of those irreversible moments of a sea change, so I think life is going to be different for corporate America after the events of January 6.” –Michael Useem
‘A Stripe of the Past’
According to Useem, executives and boards of directors across America are rethinking what it means to do business in a democracy in the wake of the attack. Staying out of the political fray is “a stripe of the past,” especially when so much is at stake, he said. Employees, consumers and other stakeholders want companies to get involved. In fact, they demand it. At Twitter, for example, CEO Jack Dorsey banned Trump after more than 300 employees wrote a letter urging him to do so. In a news release, Airbnb CEO Brian Chesky said he cancelled inauguration week reservations in response to local, state and federal officials asking people not to travel to the capital, and the company is working with authorities to identify hate-group members within its customer base. At the airlines, flight attendants have been the driving force behind no-fly lists.
“This is one of those irreversible moments of a sea change, so I think life is going to be different for corporate America after the events of January 6,” said Useem, who is also director of the Center for Leadership and Change Management at Wharton.
Companies are also facing a paradox. They need to balance short-term results for investors and owners with a long-term strategy for the health of the business. Useem said executives like Chesky are recognizing the bigger threat that comes from the erosion of democratic principles, and they are willing to take a financial hit in the short term to help ensure the republic survives. Most recently, on January 17, Loews Hotel Group canceled a February fundraiser for Republican Sen. Josh Hawley, who objected to the certification of Biden’s presidency on the day of the riot. “Loews Hotels & Co is horrified and opposed to the January 6th events at the Capitol and all who supported and incited those actions,” a Loews spokesperson said in a statement.
Corporations are also scrutinizing political donations; many have announced they will stop donating to PACs or individual candidates who supported the failed effort not to certify Biden’s election. Useem said politics has become a major topic of discussion for executives trying to figure out their role in the protection of democratic values.
“I think people on boards and in the C-suites are unequivocally coming to the view that we’ve got to step forward now,” he said.