The Corporation: a New Activist?
It's not often that corporations take unnecessary political stands. That's understandable on the face of it, since shareholders and customers tend to come from all shades and stripes of the political spectrum. Better not say anything that might bite a hand that feeds you.
But thanks to social media, this line of thinking may now be obsolete.
This is because a modern-day company can rest assured that supporters of a cause -- not just slighted detractors -- will hear about the stand. And the public vows of detractors to "never use your product/service again" can just as easily encourage supporters into frequenting the business to support their cause.
Perhaps this explains why Men's Wearhouse (NYS: MW) was so eager to embrace Occupy Wall Street last week. After an Oakland store shut down on Wednesday in solidarity with the movement (aided by a custom-made "We Stand With the 99%" poster), the company responded by embracing the movement wholeheartedly on Twitter and Facebook.
"We closed our store near Oakland City Hall today," the statement read, "... to express the company's concern for the issue of wealth disparity in our country. The issue affects our employees and customers across the political spectrum."
Facebook users' reaction? Ecstatic. The company received 422 likes and over 1,400 comments, mostly in support. The threats by some to never shop there again were answered with vows to do the opposite.
And, to be honest, I sincerely doubt that most of Men's Wearhouse's detractors will keep their promise. How many of Berkshire Hathaway's (NYS: BRK.B) (NYS: BRK.A) policyholders were willing to pay more in insurance by switching companies and going elsewhere, just because of Warren Buffett's views on taxes? Probably not many.
And when Whole Foods Market's (NYS: WFM) John Mackey alienated his company's blue-state demographic with an op-ed on health care in News Corp.'s (NYS: NWS) Wall Street Journal, did shoppers leave in droves? Not according to Whole Foods' share price, which is up 149% since he wrote it. I bet it did convince a lot of red staters, however, that Whole Foods isn't just for liberals.
And speaking of News Corp., Rupert Murdoch has exemplified the political CEO with his frequent political discussion and endorsements. Would Fox News be No. 1 in total adult viewer count without his advocacy? I'm doubtful.
And need I mention Google's (NAS: GOOG) critically acclaimed "It gets better" ad, or Apple (NAS: AAPL) donating shareholder money to fight California's Proposition 8? And let's remember that Al Gore continues to serve on the company's board. Has that hurt Apple at all?
So go ahead corporate America, take a stand. You'll probably get away with it -- and it may even help you.
Then again, if you don't want a corporation's political leanings to affect your earnings, I invite you to look at adding some of The Motley Fool's rock-solid dividend recommendations. Last we checked, these are paid out no matter which way shareholders lean politically.
At the time this article was published Fool contributor Chris Baines is a value investor. Follow him on Twitter, where he goes by@askchrisbaines. Chris' stock picks and pans have outperformed 89% of players on CAPS. He owns shares of Berkshire Hathaway. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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