Damaging Your Brand Through Politics

A Wisconsin state legislator says political donors shouldn’t have to disclose their employers because it hurts the business climate. But does engaging in politics hurt a company’s brand?

The answer is basically: the more controversial the topic, and the more directly engaged the company gets, the greater the risk — but the most risk comes from your brand’s other activities. Target famously found that out the hard way in 2010 when it publicly backed an anti-equality candidate for governor in Minnesota. Even companies that have been a bit more sly by working through the American Legislative Exchange Council have found themselves attracting unwanted attention because of ALEC’s involvement in controversial legislation like the laws in some states that make voting more difficult.

Mr. Burns’ involvement in politics turned into a branding
disaster for the nuclear plant — but only because politics
brought attention to what the plant was already doing.

But what about when employees get involved? There are certainly plenty of GooGoo databases and reports linking contributions from employees in certain companies or industries to certain votes by lawmakers. But while contributions from a polluting company to a candidate loathed by environmentalists may not do much to help that company’s brand, it seems unlikely that the contributions themselves are the core branding issue.

There are practical and moral problems with this Republican legislator’s approach.

Problem 1 — Markets like information

Most Republicans profess to be strong supporters of the power of free markets to transform just about everything. But what makes markets powerful isn’t that they’re free — it’s that they’re regulated. Markets are an efficient way to distribute certain resources, but only when everyone has access to the same information about those resources.

Ensuring equal access to information requires regulation. That’s why publicly traded companies are required to disclose copious amounts of information about their financial standing. That’s why people go to jail for insider trading.

And the same principle carries over to voting markets, which is essentially what elections are. That’s why Hart Research recently did a survey for the Committee for Economic Development that “found 91 percent of U.S. business leaders believe there is a need for more — not less — transparency in campaign finance.”

Oil & Gas Industry Political Contributions
Most brand damage from political contributions by Chevron employees likely originates with existing attitudes toward Chevron for non-political factors, like the Richmond refinery explosion.

Problem 2 — Free speech demands accountability

The philosophical underpinning of free speech, and the reason the founding fathers were so interested in protecting it, is that it creates debate, debate creates consensus around better ideas, and better ideas lead to better governing.

But in order to have a debate, you need to know whom you’re debating. In other words, you have the right to speak freely, but I have the right to speak in response, too. At least, that’s the way it works in theory and the way it ought to work in reality. Since the Supreme Court has (erroneously, in my view) affirmed money as political speech, the morally correct approach should be to at least require those using money as speech to own up to it — no matter the implications for their brand.

If a company still wants to engage in politics, that should be a risk the individual company has to weigh. It shouldn’t have the right to hide. And if a company thinks its employees’ political speech risks negative attention, it should first consider what it can do about the root reasons why people might get mad.