Leadership Now Project Files Amicus Brief in Disney v. DeSantis, Highlighting Government Retaliation as Threat to Business and Democracy

Orlando, FL, August 10, 2023 – Leadership Now Project has filed an amicus brief in Walt Disney Parks v. DeSantis, underscoring the threat that government retaliation poses to businesses and democracy. The brief highlights the alarming trend of state governments punishing companies for their constitutionally protected speech. 

The health of the U.S. democratic system and the economy relies on business, which are strained by the threat of government retaliation, hindering investment and innovation. Leadership Now Member and CityView CEO, Sean Burton warns of the risks, stating, "This case is particularly egregious because it involves government interference with established contracts. Such interference jeopardizes economic prosperity by decreasing the ability of companies to be autonomous and manage themselves. It prevents companies from investing in ways that create the most value for their employees, customers, and shareholders."

The brief underlines that this case relates to action by political leaders with little precedent in the United States and reminds us of what the future could look like for American democracy and business — a nation where political leaders could use their office to cancel contracts or enact laws directed at specific companies with whom they disagree. 

Leadership Now Member and Executive Chairperson of Jack Cooper, Sarah Amico shares her concern in the precedent this could set, explaining, “The state has weaponized the power of government to punish a private business for exercising its right to free speech on behalf of employees, customers and stakeholders. This kind of retaliation is, simply put, antithetical to the core tenets of U.S. democracy. As the Executive Chairperson of one of North America’s largest women-owned logistics businesses, I am deeply concerned about the outcome of this case. American businesses invest in our communities, create jobs for our families, and bolster our nation’s competitiveness. Government can be an important partner in that work — but only if it defends a key element contributing to the stability of the American economic system — the well-settled principle that contracts will be enforced and upheld."  

Leadership Now's CEO, Daniella Ballou-Aares, points out that “Leadership Now submitted a brief because we believe it is essential that business leaders stand together and respond when political leaders use their power to punish companies who express alternative views than them.” As U.S. businesses face mounting pressures, the threat of government retaliation only amplifies challenges, endangering economic security and democracy. By taking a clear position on this case, the Leadership Now Project’s membership of business leaders aims to protect democratic stability against these threats.

Daniella Ballou-Aares discussed the threat of political retribution in depth with Triple Pundit Managing Editor Mary Mazzoni: Beyond Disney: Government Overreach Threatens Free Speech and Good Business, Executives Say

The Challenge of Building Trust

“What will it take to rebuild trust?” asked Leadership Now CEO Daniella Ballou-Aares in the latest Democracy & Business Update on LinkedIn. “It starts with courageous individuals like Leadership Now honoree Al Schmidt, Pennsylvania's Secretary of State, who [in January] was awarded one of America’s top civilian honors for his defense of the 2020 vote while overseeing the Philadelphia election as a Republican City Commissioner. Even while he and his family endured threats to their safety, he stood up to Trump’s pressure to overturn the election results.” 

“But people like Al Schmidt alone won’t be enough to defend and rebuild democracy for the long term,” Daniella wrote in the Leadership Now update. As NYU professor and democracy expert Richard Pildes discussed at Leadership Now’s 2022 annual meeting, polarized, ineffective government fosters an atmosphere where autocratically-inclined leaders who promise to ‘deliver’ and create order through strength can gain popular appeal and undercut democracy. We've seen this play out in countries from Hungary to Brazil to Italy to India in recent years.

“With the Edelman Trust Baromoter once again showing that business is the most trusted sector in society, the burden for all of us to use that trust wisely is high. How can you help rebuild trust in our system, even as some political leaders burn it?”

Read on in the Monthly Business + Democracy Update

for Daniella Ballou-Aares’ tally of the low and high points for trusted leadership that have defined the start to 2023 — and the latest perspectives of Leadership Now and its members in the press.

Subscribe to the Monthly Business +  Democracy Update on LinkedIn.

The State of Trust Among Business & Government

The much-anticipated 2023 Edelman Trust Barometer was recently released and, once again, the results show a tremendous opportunity for business leaders.

The Barometer

For the past 23 years, Edelman has used the survey to study people’s trust — “the ultimate currency” — of institutions, including business, governments, NGOs and media. The goal of the report is to help organizations understand and navigate trust among stakeholders. The online survey sampled more than 32,000 people across 28 countries.

The Findings

Business continues to be the only trusted institution, and that trust is significantly higher than trust in government.

• Global trust: business - 62%; government - 51%;

• US trust: business - 55%; government - 42%

• US trust in business is six points higher than in 2022.

Business is seen as both more competent and more ethical than government.

• Competence: 54 points higher

• Ethical: 30 points higher

Polarization has increased at home and abroad.

• 53% of respondents globally and 67% of Americans say their country is more divided today than in the past.

• The US is one of six countries (including Argentina, South Africa, Colombia, Spain and Sweden) considered “severely polarized”.

• 41% of people said that government and business working together in partnership is most likely to result in being able to work through ideological divisions that exist.

The majority of people — on both sides of the aisle — want more engagement from business on societal issues.

• The majority of respondents expect CEOs to take a public stance on treatment employees, climate change, discrimination, the wealth gap and immigration.

• Nearly half of respondents think business should take steps to address climate change, economic inequality, energy shortages, and health care access, while only 8% thought business taking such action would be overstepping.

“...People are looking to business leaders maybe because businesses are taking action in a way that government can’t or won’t...They’re not just saying, but they’re also doing.”

— Eleanor Hawkins, Axios

The Bottom Line

As trust in government continues to erode, business has a unique opportunity to leverage its position of power and influence to both deliver results and make a positive impact on society.

Sources:

• 2023 Edelman Trust Barometer

• Axios: Trusting business over politics in shaky times

• Fortune: Can business executives help heal societal divides?

• Edelman Trust Barometer Says We Only Trust Business—And Democrats Trust It More Than GOP

New Research: How Are Business Leaders Engaging in Politics?

Tufts University Associate Professor of Political Science and Leadership Now member Dr. Eitan Hersh recently released findings from a new survey funded by Leadership Now that examines the changing partisan landscape of the business community and business leaders’ attitudes toward political engagement. On a call with our members, Dr. Hersh dove into the results and shared his thoughts. Here are some of the key findings:

Shifting Political Alignment

No matter their political preference, the majority of survey respondents believe US businesses have become more aligned with Democrats in the last decade. Executives say CEOs and employees have the most influence over corporate political alignment compared to other stakeholders such as customers or investors, and they believe CEOs and employees are causing the political realignment.

Policy Focus Areas

There is a widespread appetite among business leaders for companies to do more on most policy issues. The one exception is election administration policy — no matter their political affiliation, business leaders overwhelmingly disfavor companies becoming more involved in elections. Of the variety of social/policy issues companies can get engaged with, economic policy is the most popular. More engagement in environmental and social policy engagement was also of interest to business leaders, regardless of their political affiliation. There was near unanimous support from all respondents for companies encouraging people to vote as a strategy for civic engagement.

Corporate Political Activities

Most business leaders prefer political engagement in the form of “traditional elite methods”, such as advocacy through industry groups and executives meeting directly with lawmakers. Executives strongly disfavored turning away objectionable customers that disagreed with their own values; however younger executives in customer facing organizations/roles were much more likely to support dropping objectionable customers. About one-third of executives said that their companies regularly make political contributions and most executives believe that their companies should scale down their political contributions. Additionally, overall executives have concerns that increased company political activism would harm profitability, employee morale, and brand favorability; however, Democratic business leaders have a stronger preference for corporate activism than Republican business leaders.

In addition to the survey, Dr. Hersh conducted 30 hour-long one-to-one interviews with executives and was able to get a sense of the constraints the business leaders face, as well as the lack of awareness of what it would mean to be involved in lawmaking and policy efforts.

Dr. Hersh recently published an op-ed in The Atlantic with his thoughts on “political hobbyism — a performative form of civic engagement that has become the white-collar set’s preferred approach to public affairs.” He uses the example of companies that publicly stated they would not contribute to politicians who voted against certifying the 2020 election and then quietly went back to donating to them. He encourages business leaders to strategically get involved in long-term civic engagement, rather than take public stands but not hold themselves accountable.

Dr. Hersh plans to expand his research to include input from the general public and expects results in January 2023. We will be sure to share those findings once they are released.

Wisconsin Business Leaders Speak Out on the Importance of Democracy

Wisconsin LNP members John Florshiem and Sachin Shivaram recently released an op-ed urging business leaders to take action and protect American democracy. Florshiem is the president of Weyco Group and Shivaram is CEO of Wisconsin Aluminum Foundry. Below are highlights from the article.

• After the January 6, insurrection, businesses across the country overwhelmingly spoke out against the events, including implementing policies to prohibit providing funding election objectors.

• These actions played an important role in ensuring a peaceful transition of power.

• However, since the insurrection, threats to our democracy have continued. These threats have a direct impact on market stability and economic growth.

• Because they have a variety of stakeholders, businesses are put in the difficult position of deciding if and how to act when threats to democracy occur.

• Business leaders must use their collective voice to ensure political stability and adherence to the rule of law.

“We also know that the tempation to turn a blind eye — to believe this is not a problem of ours — is strong. But it is wrong.”

— John Florsheim & Sachin Shivaram

Read the full op-ed here.

Fast Company: American Democracy is Under Threat. Business Leaders Must Act to Ensure Safe and Fair Elections

Below is an op-ed by Daniella Ballou-Aares, David Clunie and Rhett Buttle published in Fast Company on June 6, 2022

The erosion of democracy is bad for business and the world, but everyone benefits when businesses step up to protect it.

The health and stability of American democracy are in the midst of serious threats, putting our elections and business environment at risk. The business community can take decisive action to support democracy and turn the tide.

America was downgraded from a “full” to a “flawed” democracy by the Economist Intelligence Unit in 2016, and multi-pronged threats are increasing the risk that we could face serious political instability in upcoming elections. Particularly concerning is the lack of faith in election outcomes: 32% of voters believe that the 2020 election was stolen, and politicians seeking to capitalize on this belief have introduced over 600 bills in 49 states targeting voting rights since 2020. And a major American political conference is being hosted in Budapest this year to celebrate and learn from Hungary’s autocratic prime minister, Viktor Orbán.

Political instability and the erosion of the protections that democracy offers can increase the cost of capital, stifle innovation, impact supply chains, and lead to declines in the rule of law that is foundational to the success of capitalism. Most recently, when companies like Walt Disney took public stances that ran counter to the views of the state’s elected leaders, they faced swift retaliation, echoing a pattern of political retribution against business that we’ve seen in states like Georgia and Texas. Political retribution is a tool of autocrats, not leaders of the world’s proudest democracy.

Business leaders understand the connection between a thriving democracy and economy. Forty-five of the 50 largest companies in the world were founded in democracies, and according to new data from a Morning Consult survey of over 2,500 business leaders and consumers, an incredible 96% of corporate leaders agree that a well functioning democracy is “important” to a strong economy.

Over half of business leaders surveyed say their companies are more likely than they were five years ago to take a public stance in favor of democracy, or to encourage employees to speak out themselves. Finally, the Morning Consult data show that over 80% of business leaders agree that companies should act to ensure safe and fair elections and protect democratic institutions.

This commitment to democratic engagement is evident across the business community. In the wake of the January 6 insurrection, over 120 of the nation’s largest companies halted political contributions to politicians who voted against certifying the 2020 election. Those members of Congress have lost 59% of their funding from corporate PACs (in 2021 vs. 2019) as a result. And over 450 American companies have withdrawn or suspended key operations in Russia following the invasion of Ukraine.

Everyone benefits when businesses step up to uphold democracy. For example, the Voting Rights Act of 1965 narrowed the wage gap between Black and white workers by up to six percentage points. When democracy is strong, communities build prosperity and businesses both fuel and reap the benefits.

It’s never been more clear that a strong economy requires a strong democracy. That’s why our three organizations have launched the Business & Democracy Initiative—to empower business leaders to collectively stand up for American democracy, rebuild trust in democratic institutions, and secure the next generation of stable and inclusive American prosperity.

The Business & Democracy Initiative has defined concrete actions business can take to uphold democracy. Business leaders can establish pro-democracy policies, such as giving employees time off to vote or work the polls and ensuring PAC contributions only go to recipients who demonstrate commitment to the democratic process. Businesses can advocate for federal and state democracy legislation, such as opposing measures that would make it harder for any eligible voter to cast their ballot. Corporate donation programs can also be expanded to include donations and in-kind resources for nonpartisan state elections infrastructure, from stress tests to tech upgrades and training.

Businesses depend on a functioning democracy in order to thrive, and face dramatic downside risk if the political system descends into polarization or even violence over contested election outcomes. Supporting a strong democracy is also a positive agenda for businesses and citizens to reinvigorate our social fabric, protect access to the franchise, counter polarization, and build institutions that secure our economy into the future.

Daniella Ballou-Aares is the CEO and cofounder of the Leadership Now Project; David Clunie is the executive director of the Black Economic Alliance; Rhett Buttle is the founder of Public Private Strategies.

Article: When Should Business Take A Stand?

Not engaging in political, social and moral issues is no longer an option for companies. Leadership Now recently spoke with the Financial Times about the increasing pressure for business leaders to speak out on a range of issues from voting rights to climate change.