Merck CEO Kenneth Frazier appeared to resign over President Donald Trump’s immediate response to Charlottesville protest violence.
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Hate is bad for business.
Facing pressure from activist groups and social media campaigns, several big-name technology and financial companies are promising to cut or limit their business with hate groups following a violent white supremacists rally in Virginia last weekend that led to three deaths.
Among the companies that have gone public with such statements: Internet security service provider Cloudfare, rooms-for-rent site Airbnb, messaging app Discord, Internet domain provider GoDaddy, music streaming app Spotify, dating site OKCupid, online payment service providers PayPal, ApplePay and Mastercard, and credit card company Discover.
“Most constituencies of these companies expect companies to speak out,” says Ira Kalb, professor of marketing at the University of Southern California. “There’s a far greater number of customers of these companies that are against hate.”
Large companies’ shifting attitudes toward race and diversity are increasingly reflected in their value statements. The fallout after President Trump equally blamed the white supremacists and counter-protestors at the rally led to resignations of dozens of business leaders from two White House advisory councils. Their departures underscore corporate America’s fine-tuning of its stance on these sensitive issues.
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Knowing that alienating large population segments is bad for their bottom line, many have moved diversity beyond lip service and see it as a key strategy in sales, marketing and recruitment. But with so many legal and financial implications, companies are also contending with the difficult modern-day calculus of inclusion and rejecting hate without making broad assumptions and violating customers’ freedom of expression and lifestyle choices.
“The danger of companies acting individually is determining what is a hate group,” says Charles Elson, professor of corporate governance at the University of Delaware. “Is it someone who says something you don’t like? Someone who wants to overthrow the government. Or someone who says something we all don’t like? That’s why we allow the government to determine who violates the law.”
Stridently and overtly racist groups, such as neo-Nazis and KKK groups, may be easier to spot and target for shunning by businesses. Most businesses express their right to refuse service to certain customers based on decorum, behavior and security risks. But segmenting customers based on business owners’ values is a trickier slope. And the law, as of now, doesn’t provide definitive guidance, though most states prohibit discrimination by businesses.
“The First Amendment is part of the Bill of Rights that protects the individual from government,” said George Freeman, executive director of the Media Law Resource Center. “It doesn’t protect the individual from private companies. A company is free to do really, whatever it wants.”
In June, the Supreme Court agreed to hear an appeal – likely next year — from a Colorado baker who, citing religious beliefs, refused to make a cake for a same-sex couple. A judge in a lower court ruled that the baker had violated anti-discrimination laws. Other we-won’t-serve-gay-couples business owners have lost similar battles around the country.
Knowing who you are
In facing ethical dilemmas, having specific company values serves as “a clear guiding light” for employees and executives, says Kimberly Whitler, a marketing professor at the University of Virginia. Citing coffee purveyor Starbucks as an example, she says clearly and uniquely stated values drive customers’ expectations and branding that can well justify company actions in times of tricky situations. Starbucks’ value statements require “transparency, dignity and respect,” as well as driving performance “through the lens of humanity.”
“When you have a weaker sense of what your company stands for, that’s when a dilemma occurs,” she says. “You should have a strong sense of who you are.”
Tech, finance lead the way
Silicon Valley companies drove the initial wave of cutting ties with hate groups.
Spotify says it plans to pull “hate music” from its library as soon as it is brought to its attention. Twitter continues to ban accounts that resort to “violent threats, harassment and hateful conduct”
Cloudflare dumped neo-Nazi site The Daily Stormer, calling the site’s “disgusting, vile and revolting.”
Discover and Mastercard said they’ve identified hate groups that will no longer be able to use their services.
Some of the payment processors’ abandonment of hate groups comes on the heels of an online campaign launched by Color of Change, an activist group whose aim is to pursue online racial justice. Using the hashtag #NoBloodMoney, the group has been seeking for months to get financial services companies to stop allowing hate groups to use their payment services. Color of Change said it has been using a list of hate groups compiled by the Southern Poverty Law Center to submit to companies to spur action.
The industry has partially responded, said Rashad Robinson, Executive Director of Color Of Change. “For months, we’ve been urging these companies to do the right thing and stop providing financial services for white supremacist groups,” he said. “We are trying to get clear about what their statements actually mean.”
“I think the next step is going to be continuing to keep the heat and pressure on companies that are spewing this hate agenda, continuing to identify new companies, engaging,” Robinson said. “These companies have black and Jewish and immigrant and LGBT employees who come to work every day and are actively doing things that are putting their lives and their families’ lives in harm’s way.”
Contributing: Brett Molina, Rachel Sandler
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