NEW YORK: Being an activist CEO isn’t for everyone.
Persuading the chief executive of every company to be an "activist" has enormous risks, such as potentially hurting a company’s value, layoffs, or even driving employees away, Alex Thompson, VP of public affairs at REI, said at the PR Council’s Critical Issues Forum.
REI’s own CEO, Jerry Stritzke, sent a shockwave through the media and the retail industry last November when he made the decision to close REI’s doors on Black Friday so its 12,000 employees could enjoy a paid post-Thanksgiving vacation day. The cooperative invited the nation to join in by choosing to #OptOutside, or enjoy the outdoors instead of shopping, to reconnect with family and friends.
However, Thompson said he doesn’t consider REI’s decision a form of "activism."
"Activism is an interesting word because you don’t often say, ‘I’m an activist on a Wednesday and a Saturday,’" he said. "If you meet an activist, it is a state of being that is constant, and the word infers a constant state of behavior."
Thompson added that CEO activism is enormously risky if done for the wrong reasons. He noted that the top 2,000 organizations in the world account for $35 trillion of revenue annually, half the global GDP.
"It puts jobs at risk, and we should be cautious about that as an industry," he said.
When speaking out on hot-button issues, a CEO’s reasoning must be clear and should tie to the company’s core business.
"As counselors to CEOs, we need to help them understand why they want to take a particular move on a particular issue and be strong in that counsel and not be drawn to the light like moths," said Thompson.