Corporate Chicken

Midst this summer’s preoccupation with vacations, London and (around here) the collapse/revival/recollapse of the Red Sox, a fascinating corporate-social experiment is bubbling just below the lead headlines: Chick-fil-A.

We do not, here in Massachusetts,  know much about this company, a large restaurant chain that is privately owned and has its locations South and, to some extent, West of New England.  I am not even sure whether it is a fast food outfit like a Wendy’s or a casual dining chain like Olive Garden.  But all reporting indicates that its food is really good and that the chain is growing rapidly.

The nub of the issue is the active assertions of management that gay marriage is wrong.  The question is, what impact will this activism on a social issue have upon the company.  Reportage on the opinion pages of the Globe suggested this week-end that gay marriage supporters are wasting their time trying to make an issue of this, or trying to get people to not eat at these restaurants (I gather there are only two locations that are within driving distance from Greater Boston).  The argument seems to be: the food is good so do not deprive us; social positions of management have nothing to do with the food; why single out this one company and this social issue, and isn’t it wrong to do so — for example, would liberals be happy about a social boycott of restaurants owned by Muslims, or devout Catholics?

Today’s Wall Street Journal (B-1) jumps into the fray, noting that for the short term Chick-fil-A is not likely to be badly hurt; the vast bulk of their stores are in regions that most strongly oppose gay marriage in the first place.  One of those helpful little WSJ maps attempts to demonstrate graphically the locations of stores and of anti-gay-marriage sentiment.  But the Journal is of course a finance-centric publication with urban Eastern overtones, and speculates that with the power of social media, Chick-fil-A is making what is perhaps an existential mistake, dooming its company in areas of potential major expansion at the hands of liberal tweets and blog posts.

The debate can be viewed from the standpoint of corporate governance.  Recent governance theory has suggested that the traditional focus on damage control and crisis management is an outdated concept in today’s social media world, where major brand damage can occur with lightning speed that outstrips almost any after-the-fact response strategy.  Today, this theory holds, the only game worth playing is up-front prevention of brand deterioration.  Boards are encouraged to approach this element of risk management by making sure that their company is out ahead of social media pitfalls, avoiding positions that might create a furor and becoming active in the social media world so as to continually monitor what is being said and to help shape the dialog.

Surely, based on this view of the world, what the Cathy family (management of Chick-fil-A) is doing is, as the Journal suggests, “swimming against the tide.”

There are lots of ways to think about the problem from a social standpoint. The Cathys have a right to free speech.  We do not think about the social or political views of virtually all companies we deal with (unless one of those views creates a physical or economic disaster, a palpable result which may be driven by those ideas but which is different in kind from the ideas themselves).  But the partisan sorting out of American life, reflected by our current politics, the Tea Party (and counterparts on the Left), the constant elevation of social debates to a degree that undercuts tolerance of other views, and the very democratization of the instrumentalities of communication through the internet and social media, are categorically and fundamentally altering the manner and content of how we think about decisions.

That change is the social issue which Chick-fil-A is testing.  Is this the first case where, in the long run, the mere content of social ideas espoused by a company management, social ideas which are subject to debate and not clearly abhorent across the board, will harm a company in a significant way?  Aside from the social experiment, the case should be watched by those in corporate America to inform how one must think about risk management.  Does the new corporate checklist include a review to make sure that a company and its principal players are “vanilla” on social issues?  Political issues?

Should boards police their corporations to meet the standard that our parents taught us when invited to someone’s house for dinner?  “Use the forks starting from the outside in, and whatever you say do NOT discuss politics or religion!”

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