Should companies get involved in general elections?

A few weeks ago, I was with the head of a medium-sized firm when he was asked to sign a letter to a national newspaper in support of a political party.

Edward Amory: companies declaring political preference can be a risky move in the UK
Edward Amory: companies declaring political preference can be a risky move in the UK

Personally, he supported the party, and felt that his business would be damaged if they did not form the next government, but he also believed that many of his employees would not agree with this view. 

In the end, he didn’t sign. But many of those who did were pilloried in hostile newspapers. 

His dilemma is an increasingly common one in the UK. Firms used to give money to parties, but now it is extremely unusual for a public company to do so. Instead, their chief executives, acting as ‘individuals’, are encouraged to sign round-robin letters. 

Another company of which I am aware was placed in a similar position over the recent Scottish referendum. The chief executive felt strongly that his business would be damaged by a yes vote and wanted to make this clear, but many of his employees and customers in Scotland held a different view –extremely strongly. In the end, he stayed out of the argument. 

There is a view in democracies that business has no place in elections. This is clearly wrong as private sector firms are a vital part of the economy of the UK, and if they were to overwhelmingly believe that a political party was going to damage their businesses, then surely electors should be made aware of this fact before going to the polls? 

But performing this public service may not be popular. 

Some interesting polling in the US a few years ago asked first, if a company was a person, whether it would be a Democrat or a Republican. 

Pollsters then asked voters how favourably they looked on the same set of brands. Companies – such as Walt Disney – who were not associated with either main party were nearly always those whose brands enjoyed the highest favourability scores. 

This is even more likely to be the case in Britain, where voters are more suspicious of business than in the US. 

So does this mean that firms should never become involved in elections? I don’t believe so, but what voters want is facts, not opinions. 

So companies, like other interest groups, probably have more permission than they think to explain what policies they would prefer and why. The Liberal Democrats, for instance, are currently committed to block any new airport or runway in the London area, a position that many UK businesses would regard as lunatic. 

More interestingly perhaps, there is nothing to stop firms gathering information on the views of their customers and feeding those collective opinions into the electoral mix. 

Voters would be better informed if firms found the courage to engage a little more in this election. 

But instead we must content ourselves with Shredded Wheat congratulating David Cameron on his enthusiasm for two – if not three – of its breakfast cereal. 

Edward Amory is a director of freuds

 

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