The Evolution of Good Corporate Leadership

Image on Michael McCain

Early January 3, 2020, American military personnel skillfully maneuvered an MQ-9 Reaper unmanned aerial vehicle through dark skies over Iraq. Acting on commands issued 9,980 km away by U.S. President Donald Trump, they locked the latest in precision air-to-ground ordnance on a group of SUVs leaving Baghdad International Airport. The convoy in question was transporting numerous individuals, but the U.S. missiles were aimed at Iranian Major General Qasem Soleimani, who had just arrived for meetings with Iraqi officials.

As head of an elite military unit responsible for Iran’s expansionist policies, Soleimani was considered a terrorist by the United States, but he was also seen as a national hero back home, which is why two previous U.S. presidents had concluded that eliminating him via targeted killing was too risky. But for some reason, Trump had decided to throw the caution of his predecessors to the wind, and so a U.S. hunter-killer drone launched a Hellfire missile strike that killed Iran’s second most powerful person, on Iraqi soil, without congressional approval.

According to White House officials, Soleimani was killed to ward off imminent threats to American diplomats and soldiers. But with Trump facing impeachment at the time, more than a few people concluded that he was recklessly following the political playbook popularized by Wag the Dog—a 1997 black comedy in which a president manufactures a military crisis to look tough, hoping to distract voter attention from a scandal that threatens his re-election. Either way, after bringing the two nations to the brink of war, Trump threatened to bomb Iranian cultural sites if any action was taken to avenge Soleimani.

On January 8, Iran launched Operation Martyr Soleimani and fired numerous ballistic missiles at military bases in Iraq that housed U.S. troops. With no fatalities reported after the dust settled, the world let out a collective sigh of relief—until tragic news broke. During the fog of Iran’s response, Ukraine International Airlines Flight 752, a civilian aircraft, was shot out of the sky over Tehran by jittery Iranian military defense personnel.

Michael McCain, CEO of Toronto-based Maple Leaf Foods, which has more than 11,000 employees in Canada and the United States, blamed Trump for the accident, which claimed the lives 176 people, including the wife and 11-year-old son of a Maple Leaf Foods employee. Without mentioning the president’s name, McCain used his company’s official Twitter account to express what he made clear were “personal reflections” about the tragedy, letting the world know he thought dozens of innocent people had needlessly lost their lives because Trump was a dangerous narcissist running an administration that had attempted to distract voters from its domestic political woes while being left unchecked by a failing American political system.

Business leaders have accused U.S. presidents of being self-serving commanders-in-chief before. In fact, before Trump ran for office, he repeatedly claimed former President Barack Obama was a dog wagger. For example, one of Trump’s tweets in 2012 warned: “Now that Obama’s poll numbers are in tailspin – watch for him to launch a strike in Libya or Iran. He is desperate.”

Nevertheless, like most things associated with Trump, McCain’s series of tweets garnered a mixed public reaction. As Joe O’Connor noted in a National Post story “it was liked, hated, re-tweeted, trolled, commented upon, shared and eventually picked up by the New York Times and CNN, among other American media outlets, a not uncommon fate for a controversial missive on social media.”

The corporate world was also divided by McCain’s blunt assessment of Trump’s leadership, with critics insisting he crossed a clear line by using the official Maple Leaf Foods Twitter account to spread personal opinions without any regard for the corporate bottom line.

According to Michael Taube, a syndicated political columnist and former speechwriter for past Canadian Prime Minister Stephen Harper, McCain’s tweets were the “outrageous and irresponsible” act of a rogue CEO. By using the corporate Twitter handle as his personal soapbox, Taube argues that McCain put shareholder value and the livelihood of Maple Leaf Foods employees at risk by committing a major corporate faux pas that no responsible business leader would consider. In a Troy Media opinion piece, Taube wrote: “Imagine a CEO of Disney, Apple or General Motors declaring a world leader like Trump to be a ‘narcissist’ on a corporate social media account. Some consumers would be furious and start calling for the person’s head on a silver platter – or a boycott of the company.”

This argument, of course, overlooks the mass resignation of U.S. corporate leaders from Trump’s business advisory councils following his controversial comments on the deadly violence that erupted between protestors and attendees of a far-right nationalist rally in Charlottesville in 2017. None of the CEOs in question came out and said that they thought Trump was leading the nation like a white supremacist sympathizer, but their actions did. For example, Kenneth Frazier, one of America’s most prominent black CEOs, quit Trump’s manufacturing council shortly after Trump insisted there were “some very fine people” on both sides of the conflict. In a statement, Frazier passionately noted: “America’s leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy” and that “as a matter of personal conscience, I feel a responsibility to take a stand against intolerance and extremism.”

In his Financial Post column, Terence Corcoran raised a fair point by asking if McCain had cleared his tweets with company directors before sending them via an official Maple Leaf Foods social media feed. But he was wrong when he implied that there is no way to justify McCain’s actions. “The corporate world,” Corcoran wrote, “has come to expect CEO virtue signaling on climate and social issues, mostly for political and strategic reasons, but McCain has taken using the corporate platform to promote personal opinions to a new absurd level. Even if he does control 38 per cent of the corporation, McCain has gone way beyond the norms of CEO intervention in corporate affairs.”

“While fans of the shareholder primacy model are free to resist change, there is no universally accepted line that separates the duties of corporate leaders and the personal views that they hold, especially not on matters of interest to the stakeholders they serve.”

There is no question that CEOs are accountable to company stakeholders via corporate boards, but the guiding principles of corporate leadership and governance are constantly evolving. In August 2019, for example, America’s Business Roundtable made headlines by issuing a statement to update its thinking on the purpose of a corporation, which listed commitments to customers, employees, suppliers, and communities before mentioning the generation of long-term value for shareholders.

This statement—which aimed to set a modern standard for corporate responsibility—was greeted with both scowls and applause because people still have different views on the purpose of corporations (see the IBJ Insight entitled “Rounding Out the U.S. Call for Social Corporate Purpose”). But while fans of the shareholder primacy model are free to resist change, there is no universally accepted line that separates the duties of corporate leaders and the personal views they hold, especially not on matters of interest to the stakeholders they serve.

Meanwhile, there is clearly a growing demand for corporate leaders who do more than pretend to be woke via empty virtue signaling. Indeed, according to the 2020 Edelman Trust Barometer, the majority of consumers surveyed expect today’s brands to help solve societal problems like climate change, ethical use of technology, and diversity, while the majority of employees expect CEOs of their organizations to lead on change rather than waiting for the government to impose it.

And so, as Institute of Corporate Directors CEO Rahul Bhardwaj notes, while McCain might have veered out of the lane that CEOs and directors typically drive on a normal day, the lane change he took—following an avoidable tragedy that directly impacted Maple Leaf Foods—isn’t necessarily out of line with the evolving nature of what constitutes good corporate governance. What is clear, Bhardwaj adds, is that the conversations surrounding governance and corporate leader responsibilities that were already taking place before McCain’s tweets will now “grow broader, and deeper, and faster in the months to come.”

While criticizing McCain, Corcoran also wasn’t being fair when he stated that “it takes a twisted feat of ideological gymnastics and deep logic-stretching to reach the conclusion that the chain of events leading up to the missile takedown of the Ukrainian passenger jet can be morally traced back to Trump and his decision to take out a murderous Iranian general.”

Unless you are a White House insider, there is no way of knowing for certain whether the targeted killing of Soleimani was ordered with no self-serving intent following careful consideration of the risks. But given Trump’s personality and track record, McCain’s assessment of what motivates Trump was not wildly unreasonable, especially after no supporting evidence of an imminent threat to Americans in the region was provided by his administration in after-the-fact briefings to U.S. senators.

Magazine columnist Scott Gilmore wrote an article in Maclean’s that linked the downing of Flight 752 to Trump’s impeachment. After it went viral, he regretted penning it—but only because he felt uneasy about profiting professionally from a tragedy. “I have absolutely no doubt that President Trump was a pivotal reason for that plane crash,” Gilmore told CBC. “If he hadn’t ordered that assassination, those people would still be alive. But I also think that sometimes we just need to mourn, and that there are moments when it doesn’t do any of us any good to be trying to drag politics into a tragedy.”

The flip side of this logic is that there are moments when it does do good to make legitimate connections between politics and tragedy, especially if you hold a position of influence.

McCain didn’t issue his controversial tweets for personal gain. He sent them for the same reason he mostly ignored the advice of his company’s lawyers and accountants when accepting responsibility for the deadly tainted meat scandal that threatened his company’s future in 2008. He tweeted his views about Trump because it felt like the right thing to do, which is consistent with his own values as well as with the stated values of his organization. And as O’Connor pointed out, McCain’s voice was heard because he “isn’t a bleeding-heart Hollywood actor, aging rock and roller, card-carrying Democrat or you-name-the-type who stereotypically rages against President Trump.”

In other words, McCain’s decision to speak out carried weight because it came from someone with capitalist credibility.

In a Harvard Business Review article on CEO activism published in early 2018, Aaron Chatterji and Michael Toffel pointed out that the so-called Michael Jordan dictum—which notes “Republicans buy sneakers too”—used to be enough to keep executives from speaking out on issues not related to the bottom line. But this dictum has been watered down by frustration and outrage over political partisanship and gridlock in the world’s largest economy, where Bank of America CEO Brian Moynihan told The Wall Street Journal: “Our jobs as CEOs now include driving what we think is right.”

As Chatterji and Toffel put it, “Political and social upheaval has provoked frustration and outrage, inspiring business leaders like Tim Cook of Apple, Howard Schultz of Starbucks, and Marc Benioff of Salesforce—among many others—to passionately advocate for a range of causes.”

What motivates this behaviour obviously varies from CEO to CEO. Some do it simply because they think taking social stands is expected by stakeholder groups. Some do it just when they think doing so looks better than remaining silent. But others are genuinely moved by personal convictions about what constitutes good leadership (honesty, integrity, courage, selflessness, etc.) and what role corporations should play in society. And with everything that is going on in today’s world, this latter camp appears to be in demand like never before.

Late last year, the anonymous Trump administration Republican who claimed to be part of an internal resistance to what he called the president’s worst impulses published a book in order to do two things: admit defeat and issue a warning. While insider accounts of Trump’s immoral, self-serving, erratic behaviour have piled up with little impact, he or she noted that “the pile is now a mountain, and the stories paint the portrait of a leader who handles the nation’s affairs with persistent negligence.” Meanwhile, the anonymous individual reports that pretty much anyone who was willing to speak truth to power has either fled the administration or been fired.

In this context, McCain’s tweets were not the act of an executive gone rogue.

Doing what you think is right as a leader isn’t always difficult. But it is never easy when it puts you in the crosshairs of Trump or any elected officials. And whether you agree with McCain’s words or not, you can clearly argue that they were meant to help heal an organization wounded by the tragic loss of the company’s extended family members while serving to raise awareness of legitimate concerns with the so-called leader of the free world that are shared by too many other people of influence who remain unwilling to voice them.

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