Executive Briefings

As Politicians Craft Social-Issue Legislation, Corporate Pressure Can Pose Hurdle

Corporate America usually hasn't viewed hot-button social issues as any of its business. Then came Indiana. The controversy over the state's religious rights measure signed into law recently has been striking for the parade of well-known businesses that not only joined in the opposition to the law but took the lead in voicing their disapproval.

As Politicians Craft Social-Issue Legislation, Corporate Pressure Can Pose Hurdle

From Apple Inc. in Silicon Valley to Eli Lilly & Co. in Indianapolis, the corporate revolt crossed sectors and regions and is widely seen as crucial in forcing the hasty retreat of many conservative lawmakers both in Indiana and in Arkansas, where a similar bill passed and faces possible change.

Arkansas Gov. Asa Hutchinson, a Republican, and allied state lawmakers found themselves in the crosshairs of the state's largest employer, Wal-Mart Stores Inc., even before the legislation passed.

"There's now an expectation from consumers that companies are going to act as citizens of the world in a different way, that they're going to take responsibility for things that are outside the direct customer-investor model," said Adlai Wertman, professor at USC's Marshall School of Business.

"The risk-reward profile has changed," he said. "It's gone from 'I'm afraid I might offend somebody' to 'If I don't do these things, I'm letting down my customers.'"

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From Apple Inc. in Silicon Valley to Eli Lilly & Co. in Indianapolis, the corporate revolt crossed sectors and regions and is widely seen as crucial in forcing the hasty retreat of many conservative lawmakers both in Indiana and in Arkansas, where a similar bill passed and faces possible change.

Arkansas Gov. Asa Hutchinson, a Republican, and allied state lawmakers found themselves in the crosshairs of the state's largest employer, Wal-Mart Stores Inc., even before the legislation passed.

"There's now an expectation from consumers that companies are going to act as citizens of the world in a different way, that they're going to take responsibility for things that are outside the direct customer-investor model," said Adlai Wertman, professor at USC's Marshall School of Business.

"The risk-reward profile has changed," he said. "It's gone from 'I'm afraid I might offend somebody' to 'If I don't do these things, I'm letting down my customers.'"

Read Full Article

As Politicians Craft Social-Issue Legislation, Corporate Pressure Can Pose Hurdle