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Sunday, 28 October 2012 16:07

Corner office politics

Written by  Brian Edwards & Joe Boomgaard
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David R. Fernstrum, Mika Meyers Beckett & Jones David R. Fernstrum, Mika Meyers Beckett & Jones

WEST MICHIGAN — It’s no surprise to hear business leaders aren’t big fans of President Barack Obama. But the number of CEOs speaking out to employees about the negative impact of a second term for Obama is, by some accounts, unprecedented.

The examples abound: CEO David Siegel of Orlando, Fla.-based Westgate Resorts, a privately held real estate and time-share company, urged employees to vote for Mitt Romney in a widely circulated email. Siegel also told employees that if Obama is re-elected next month, they’d be out of job and he’d be retired on a Caribbean Beach with “no workers to worry about.”

Locally, the chief executive officer of Lacks Enterprises warned workers that their paychecks would be smaller if Obama is re-elected, according to an MLive.com report. And Autocam Corp. CEO John Kennedy posted a YouTube video that included employees as part of his opposition to the abortion-related mandates of the Affordable Care Act. Kennedy also sued the federal government in U.S. District Court, though a judge later refused to expedite the suit.

It’s worth noting that these executive actions, while interesting, aren’t necessarily out of the ordinary. A recent study showed that 35 percent of employers openly share their political views with employees.

It does raise the question: Is a CEO within rights to talk politics in the office?

The answer: Yes, but proceed with caution. And try to stick to the impact that political choices will have on the business, rather than the world at large.

That’s what MiBiz heard when it spoke with local experts in law, public relations, corporate ethics and psychology about political discourse by the boss in the workplace. Each offered insight into his own specialty, but also offered practical advice for executives who decide to engage in political conversations with employees.

Legal

One of the reasons behind the rise in political pronouncements from the corner office is that the rules have changed, said David R. Fernstrum, a labor attorney at the Grand Rapids office of Mika Meyers Beckett & Jones, PLC.

The Supreme Court’s 2010 decision in Citizen United v. Federal Election Commission prohibits the government from restricting independent political expenditures by corporations – a move that changed the law but also the tone when it comes to businesses promoting political viewpoints.

“With Citizens United, the courts said we’re not going to allow the government to curtail corporations’ rights to political speech,” Fernstrum said.

Still, there are some legal limits. Section 594 of Title 18 of the Federal Election Law protects employees – and all citizens – from threats, coercion or attempts to intimidate them in relation to their vote. The National Labor Relations Act also gives private-sector employees the right to participate in group activities for their “mutual aid and protection” – regardless of whether they’re a union shop or not. So a worker could, for example, wear a “Support the UAW/Support Obama-Biden,” button, Fernstrum said, adding that “it would be a violation of the NLRA for an employer to interfere with that expression.”

Some states, including Oregon and New Jersey, have enacted laws that prohibit employers from forcing workers to listen to political, religious or anti-union propaganda. Michigan has no such law.

Employers who get overly involved in politics sometimes find their views create more animosity and backlash than anticipated. That can lead to lost work time, inefficiencies, arguments and even violence, said Fernstrum, who offers some practical advice: “From my perspective, caution is the watchword.”

Public relations

If companies welcome the sharing of different views, then it makes sense for the CEO to share an opinion about an election or ballot proposal, but he should limit his commentary to the impact on the business, said Jeffrey T. Lambert, managing partner of Grand Rapids-based Lambert, Edwards & Associates Inc.

“As a CEO, you need to balance your personal tax situation versus your corporate tax situation,” Lambert said.

It’s also important for owners to think about the wide-ranging implications of their remarks, particularly in the era of social media. There’s a new layer of complexity – and transparency – as a result of Twitter and other social media, Lambert said. That means your speech to employees could end up being broadcast to customers, vendors, bankers and others.

“It’s not just your employees who pay attention to what you say,” he said. “You need to be weighing, as you would in any situation, how (your comments) will be received.”

While leaders in privately held companies have plenty of leeway in what they can say, public company executives are better off avoiding political discussion rather than risk shareholder litigation, said Lambert, whose firm provides counsel to public companies including Wal-Mart Stores, Wolverine World Wide, Spartan Motors and others.

“They’re more visible and held to a higher standard,” he said. “In most cases, they’re better off not talking than taking a position.”

Corporate ethics

If executives feel the need to discuss their opinions with employees, company leaders should go about it in an educational and non-threatening way, said Michael DeWilde, associate professor at Grand Valley State University and director of the school’s Business Ethics Center.

It’s well within employers’ rights to speak their views, but good corporate environments are ones that foster a good give and take, DeWilde said. Bosses should avoid hyperbole and stretching the truth and just stick to the facts, he said.

Free speech for executives – and for their workers – should be protected, but implicit or direct threats based on voting behavior should not be, he said.

“The more admirable path is to make an information campaign and leave implicit threats and coercion out of it,” he said.

Even with educational campaigns, employees also have the responsibility to do their own due diligence and come to their own conclusions, DeWilde said. But the boss is “well within his right” to discuss how the business could be affected by decisions at the voting booth, and it’s equally right for employees “to push back – let the best argument win,” he said.

In other words: Don’t take what the boss says as gospel.

“The most ethical thing a company can do is say, ‘Here are both sides of the issue. I’m voting this way and this is why I’m going to do it,’” he said.

Corporate psychologist

It’s important to remember that employees, particularly in small businesses, often look to leaders for advice and counsel on topics unrelated to their jobs. That presents some challenges, but also many opportunities for executives and owners of firms.

“Any owner has a right to say, ‘This is what I think and this is what I think will affect the business,’” said Joe Horak, Ph.D., senior director of leadership development and family business consultation at DWH, a Grand Rapids-based consulting firm. And while it’s always safest to stick with the impact on the business when it comes to political speech, there may be times when it’s wise – and even strategic – to talk outside those lines, he said.

“Some business leaders may choose to go more public with their political views because it may align with larger company strategy” such as the environment or sustainability, he said. The flipside is that there are other times when a leader may find it better to stay quiet about his or her strong personal values because they don’t align with corporate strategy. Learning when to go one way or another is a skill that many leaders develop over time, he said.

And as executives develop their leadership to higher levels, they are usually less self-absorbed and more concerned about the world around them, Horak said. “It’s a sign of a more highly developed leader when they start caring about things beyond their own company – when they care about the community and the world. Those can be very positive things.”

That includes talking about politics and offering opinions on ballot proposals and presidential candidates, including who they believe is best for the community and the world – not just the company – without crossing the line into scare tactics or intimidation.

“It can be helpful and important to leaders to make sure their corporate vision includes their values and what they care about,” Horak said. “But that also needs to be tempered with the fact that in an election year … they need to respect the right for everyone to vote his or her conscience.”

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