In recent months, American CEOs have spoken out on social and political issues like never before, placing the businesses squarely within the national debate. Much of the newfound resolve among executives to engage in the cultural disputes of the day is a result of the pressures that CEOs feel from employees and customers to communicate a message of social and moral responsibility on behalf of the company.
As CEOs speak out, federal and state regulators remain permitted to police the bounds of a wide range of corporate political activity. The pressure that the 24-hour news cycle places on companies to respond immediately to developing events puts business leaders at risk of acting without realizing that their statements approach the line of regulated, or prohibited, corporate political activity. Most activities that executives have engaged in to date, such as stepping down from advisory councils, signing public letters urging administrative action, or publicly supporting rights of employees to peaceably protest, do not cross the line into the morass of ethics laws that govern corporate political activity. The First Amendment ensures a certain amount of leeway for executives and others to criticize or support the statements of elected officials, speak out on social issues, and engage with employees and customers to communicate their company’s social or political values. In many cases, these protections apply whether the CEO is speaking out personally or in their role as a company leader. As some executives have recently learned, however, regulation of their social and political activities still exists.
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