Keeping quiet as a mouse isn’t the safe option anymore.
Just ask The Walt Disney Co., which failed to use its voice and the full weight of its influence to stymie Florida’s controversial Parental Rights in Education law and instead riled up employees and got into essentially a food fight with the state’s conservative firebrand governor Ron DeSantis.
Disney’s experience is a lesson to fashion brands and retailers, which wear their inclusiveness on their sleeves and wave their Pride flags especially hard each June, but in many cases have been quiet on what could be seen as a core issue for the industry.
Florida’s law, signed into law in March, “prohibits classroom discussion about sexual orientation or gender identity in certain grade levels.” Dubbed “Don’t Say Gay” by critics, the law is at the leading edge of a wave of copycat and similar measures in state houses across the nation, representing a vital front in the culture war over LGBTQ rights.
For fashion, which draws so much inspiration from, has such deep roots in and markets so extensively to the LGBTQ community, it’s almost the definition of a must-win topic for the industry.
But the outcry so far has been more of a whisper — in fashion and beyond.
Business hasn’t been silent on the rise of state legislation, which according to The Human Rights Campaign and Freedom for All Americans amounted to 26 anti-LGBTQ bills enacted into law across 10 states last year with more than 160 proposed measures still pending.
A business statement coordinated by the two advocacy groups drew more than 150 companies, including Amazon, Gap Inc., H&M, Macy’s Inc., Nike Inc., Patagonia, REI Co-op, Signet Jewelers, Target, Warby Parker and, belatedly, Disney.
The statement says: “Laws that would affect access to medical care for transgender people, parental rights, social and family services, student sports, or access to public facilities such as restrooms, unnecessarily and uncharitably single out already marginalized groups for additional disadvantage. They seek to put the authority of state government behind discrimination and promote mistreatment of a targeted LBGTQ population.”
Even so, that is just a fraction of the fashion world and observers sense a general hesitancy in the C-suite to weigh in on the issue.
Part of that could come from Disney’s experience.
The back and forth with DeSantis culminated in the dissolution — for now — of a 55-year-old special tax district covering Disney World, although the high-profile move is controversial in itself as it would transfer certain debts back to county governments.
But chief executive officers might also be feeling the weight of the world, trying to retreat back into a position that has them focusing on business. Addressing or even articulating the need to fix society’s ills — from LGBTQ and reproductive rights to systemic racism and climate change — is a big job.
But according to the 2022 reading of the Edelman Trust Barometer, it’s a task that CEOs are uniquely positioned to take on right now.
Sixty-one percent of those surveyed found business to be the “most trusted institution,” leading non-governmental organizations (59 percent), government (52 percent) and the media (50 percent).
“While business outscores government by 53 points on competency and 26 points on ethics, respondents believe business is not doing enough to address societal problems, including climate change (52 percent), economic inequality (49 percent), workforce reskilling (46 percent) and trustworthy information (42 percent),” Edelman said.
The bond between employee and company is especially strong, with Edelman finding that 77 percent of respondents trust their employer.
As Disney appeared to soft pedal around the Parental Rights/Don’t Say Gay debate when it was in a particular position to influence the lawmaking process given its presence in Florida, employees started making some noise — enough noise to generate an extraordinary mea culpa from chief executive officer Bob Chapek.
“Speaking to you, reading your messages, and meeting with you have helped me better understand how painful our silence was,” Chapek wrote in a memo to employees, which was published by Variety. “It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights and I let you down. I am sorry.
“Our employees see the power of this great company as an opportunity to do good. I agree. Yes, we need to use our influence to promote that good by telling inclusive stories, but also by standing up for the rights of all.”
Disney did not respond to a WWD query for comment. But Chapek’s resolve and public statements on the matter ultimately came too late to stop the Parental Rights bill in Florida.
An open letter from a group of Disney employees, or cast members, showed how the rank and file — or a big enough portion of it to matter — clearly wanted more and took the company’s leaders to task, noting their statements “have utterly failed to match the magnitude of the threat to LGBTQIA+ safety represented by this legislation.”
“Cast Members’ identities are not ‘political issues,’ our safety and well-being is crucial to the success of this company, no cast member or their families should be forced to live in fear, and it is unacceptable to use the profits of our labor to take our human rights away,” the letter said.
“[The Walt Disney Co.] claims to integrate [diversity, equality and inclusion] in its core values but the employees have yet to see fruitful integration of this program that is properly uplifting marginalized voices, moreover in an intersectional way,” the letter said. “By supporting the politicians who brought this legislation and not taking a public stand against it, Chapek and TWDC leadership have made it clear they are more than willing to sacrifice their employees’ health and wellness in service of the bottom line. We will not stand for this anymore.”
And that is the refrain across the corporate world, especially with younger, reform-minded employees coming on board and making sure their voices are heard.
“Employees are not an insignificant stakeholder group,” said Mark Lipton, board adviser and professor emeritus at the Parsons School of Design and The New School. “My gut tells me that if the employees did not mobilize, that if they themselves did not create an internal movement for this to happen, we probably wouldn’t have heard a peep.”
C-suite leaders need to not just be in tune with their employees on key issues, they have be ready to speak up themselves and know when and how to lend their voice to various issues.
Right now, the corporate voice is uneven.
“The CEO needs to be perfectly clear — in what areas am I willing to take a bullet on this because my belief is so strong and I have a very important pulpit from which to speak?” Lipton said.
Companies of all shapes and sizes have been quick to not only speak out against Russia’s invasion of Ukraine, going as far as halting operations in Russia and preparing to sell off whole divisions at a discount, as offpricer The TJX Cos. has done.
But fewer corporate heavies have waded into the parental rights/Don’t Say Gay laws or the revelation that the Supreme Court is preparing to overturn Roe v. Wade.
On one hand, CEOs are as busy as ever navigating a complicated business landscape with the stock market in retreat, inflation at 40-year highs, consumer spending uncertain after last year’s buying boom, the continued digitization of style and the rest of it.
But CEOs are also being seen more than ever as something more than a corporate manager and being asked — or forced — to take on a broader role that requires business savvy and more than a little moxie.
“The climate is dark now,” Lipton said. “It takes a bolder CEO to step out there and really convey, ‘We’ve got a lot of problems right now, but this is a horrific situation and we’re taking a stand on this not for the company, but for the greater good.’”
There is certainly some boldness in the C-suite. Levi Strauss & Co. CEO Chip Bergh took a stand on gun control asking patrons to stay away even if they’re legally able to carry a gun and received death threats, proving just how hard such stands are. It wasn’t a surprise to see Levi’s, which has long lead on cultural issues, sign on to the business statement over LGBTQ rights.
But many other CEOs are not taking advantage of their newly found cultural megaphone.
“Here you’ve got this extra asset of the CEO with a tailwind of a populous who now feels that they’re credible,” Lipton said. “At the same time, the CEOs are putting their hands up and saying, ‘I’m not there.’”
A survey of Fortune 500 CEOs by Fortune found that the impulse in the corner office is to become quieter. Asked if CEOs should take positions on social and political issues, 72 percent responded, “No, CEOs have become too involved, and need to pull back.” The other 28 percent chose, “Yes, CEOs have a responsibility to speak out.”
But more and more, CEOs might find they have to get there or risk getting in the situation Disney fell into.
Executive coach and equality and justice adviser Charlene Wheeless said CEOs used to be able to lie low and not stick their necks out for a social issue that is burning-hot one moment, but might go away.
“One of the lessons that is very clear from what’s happened is that time and silence are no longer on your side,” Wheeless said. “Companies have to act quickly and be as decisive as they can on what they’re going to do.”
And they need to be doing it out in the open.
“Transparency trumps all,” she said. “It’s not unusual for a company today to say, OK, let’s use our power behind the scenes to try to impact it. Today, if you don’t tell people what you’re doing, you’re doing nothing.”
And doing nothing is no longer an option in a world where profit is just part of the definition of success.
“For the fashion industry, there’s never been a more important time to lean into your values because many of the people who make up the fashion industry are under attack,” Wheeless said, referring to LGBTQ issues. “Over the years, particularly when it comes to race, we have seen some high-value brands make mistakes and then try to course correct.
“This is an opportunity to start it right at the beginning,” she said. “Lean on your values and show people that they matter because that’s what’s running your business. The world and society has changed and it changed very quickly where there is an expectation to make people matter. You lead first with humanity, empathy and compassion and companies that don’t do that find themselves in a firestorm.”
It’s a job that everyone has a hand in, but one that requires leadership from the top.
“We are in the era of the courageous CEO,” Wheeless said. “And if the CEOs do nothing, nothing happens.”
Figuring out just how to be truly courageous might not be something that CEOs picked up in business school or on their way up the corporate ladder.
And there’s also the matter of becoming a voice not just for the issue of the moment, but the next issue as well and representing — truly and honestly — the ideals and dreams of an often far-flung and diverse employee base.
It’s a change and not necessarily an easy one.
“Companies are increasingly acting as if they are people because they’re made up of humans that have opinions and needs, so companies are pushed to become more like people,” said Greg Portell, lead partner in Kearney’s global consumer practice. “It’s hard to stay on the sidelines on any particular issue.”
But big companies have a lot of employees and different levels of comfort on different topics, Portell said.
“One could argue that fashion brands have stayed on the sidelines for some of these societal issues more than they should,” Portell said. “When we’re advising executive teams, it goes back to a sense of authenticity and purpose. That sounds trite, but part of the lesson is, ‘Don’t weigh in on issues that you’re not prepared to help solve.’”
And that’s one of the key areas where companies and nonprofit advocacy groups diverge.
“Where progressive companies struggle is that their constituencies have this ambition for them to be involved, in the front, leaders,” Portell said. “An advocacy group can pick and does pick one issue, whether it’s women’s equality, gay rights, gun violence, they have the luxury of picking one issue. A corporation doesn’t and so, in a world that’s increasingly single-issue decided, companies are always going to get pinched.”
And that seems likely to only increase as the society splits along new fault lines and people and institutions reset.
Consultant Jonathan Low, a partner at Predictiv who specializes in gauging the financial impact of intangibles like brand and strategy execution, said the scene is set for government and business to continue to clash.
“There are many conservative politicians around the country who are simply looking for an opportunity to make an example of someone,” Low said. “It could have been gun rights, gay rights, Black Lives Matter. It could have been anything. If you stand up, they’re going to try to knock you down.
“The lesson for CEOs is pretty basic,” Low said. “Understand your audience, understand where your reputation and your revenues and your profits come from and defend that and everything else will take care of itself.
“Disney is unique compared to other major corporations in that they control a significant swath of both the second and third most populous and economically important states in the U.S. — California and Florida,” Low continued. “They fell prey to the mind-set that they’re just going to handle this behind the scenes. There is no behind the scenes. The lesson Disney has learned is, ‘Where are our customers?’ That’s the only thing that should be driving our decisions.”
Having some sort of gut-level guiding principle is all the more important when the landscape is shifting so dramatically.
Fashion, for instance, has long dipped a toe into politics. But while in years past it was typically the designers championing liberal social causes and Democrats and the CEOs backing the business-minded Republicans, the dynamic is changing.
The Republican party has changed dramatically under the influence of former President Donald Trump and is now bringing in more of the blue-collar workers while the CEOs are being pushed to become almost standard bearers — for the globalization their businesses helped build and the social causes their shoppers care about.
And that could keep big business in the political sphere, where mudslinging is a professional sport, as Disney and Florida’s Ron DeSantis demonstrated.
“It’s driven by the news cycle,” said Low. “I think DeSantis is saying, ‘OK, we can attack Disney this week and we’ll be trending on Twitter…We don’t even need to follow through.
“I think DeSantis has also learned a little bit of a lesson, which is: This isn’t a trick you want to pull frequently,” Low said. “Disney’s pretty big, too, and if they really want to be your enemy…they have the resources to make sure you feel it.”
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