Why it's smart for big business to take a stand on 'religious freedom' laws

Companies in Indiana and Arkansas say opposing "religious freedom" laws in their states wasn't just the right thing to do; it was also the right thing for their businesses.

Walmart garnered praise for helping to change the conversation in Arkansas.
Walmart garnered praise for helping to change the conversation in Arkansas.

The governors of Indiana and Arkansas signed fixes on Thursday for "religious freedom" bills in each state to ensure businesses could not refuse service to LGBT individuals. Yet the two states only got to that point after pressure was applied by not-usually-aligned organizations such as advocacy groups, local businesses, tech heavyweights, and major sports leagues that expressed concern or total disdain for the law in its initial form.

One corporation garnering praise for helping to change the conversation in Arkansas is Walmart – not always a favorite of progressive organizations on this issue – for its role in changing the legislation in its state. Hours before Governor Asa Hutchinson, a Republican, asked lawmakers to clarify the bill, the retail giant tweeted its opposition to the law.

Communications experts told PRWeek that brands getting involved with social issues is no new phenomenon, and in many cases it’s smart for businesses to take a stand. Yet this particular issue has many special circumstances.

"It is no longer mutually exclusive to be doing the right thing and to be increasing your company’s bottom line," says Stephen Macias, SVP at MWW and lead of its LGBT practice. "What is making the Indiana situation front and center is commerce. Businesses and people are getting into the conversation and saying, ‘We’re not going to make the choice to spend money where people are not being treated fairly.’"

He notes that this issue not only affects the LGBT community, but also "everyone else it intersects." More than half (54%) of Americans favored same-sex marriage in 2014, and that number jumped to 68% among Millennials, according to the Pew Research Center.

In-state businesses also had a major impact on the law in the Hoosier State. On Monday, nine Indiana-based CEOs sent a letter to Governor Mike Pence and the president pro tempore of the State Senate saying they were "deeply concerned about the impact [RFRA] is having on our employees and on the reputation of our state."

Jeffrey Smulyan, chairman, president, and CEO of Emmis Communications, says he was "inundated by emails from staff expressing their gratitude for him taking a stand. Along with other Indiana-based companies Eli Lilly and Anthem, Emmis has routinely spoken out on issues considered discriminatory toward the LGBT community.

"To compete nationally and globally, we have to have the most talented, dynamic workforce that we can find," he says. "You can’t put constraints on that workforce and only take certain types of people."

Corporations are realizing that inclusiveness is a forward-looking trait. Macias adds that his firm works with corporate clients to build a "bridge from the past and the present into the future." Some clients come to the firm seeking guidance on how to embrace the LGBT community and its allies in ways that are "thoughtful and kind and, most importantly, authentic."

Hutchinson’s office says his decision wasn’t influenced by one company or organization. 

"Walmart is definitely entitled to speaking out against something, but at the end of the day, the decision came from the governor," says JR Davis, his communications director, who adds that Hutchinson "likes to listen to all sides" when making a decision. "Obviously people are watching what was going on in Indiana. This governor just likes to have his facts before making a decision. That’s just his nature."

Content and integration in action

The Human Rights Campaign releases a yearly Corporate Equality Index, which grades "corporate policies and practices pertinent to lesbian, gay, bisexual, and transgender employees." In 2015, 366 businesses earned a perfect score. Sainz says in the CEI’s earliest days, only 13 companies managed a perfect score.

The entire list of Best Places to Work for LGBT Equality is here, and some who notched a 100% include Interpublic Group, MSLGroup Americas, Ogilvy, Publicis Healthcare Communications, and Publicis Groupe.

‘A watershed moment’
Fred Sainz, VP of communications and marketing at Human Rights Campaign, explains that the outpouring of support over the past week is no isolated incident.

"People tend to think it has crept up on us; the truth is every single victory and defeat we’ve had over 45 years has been cumulative in making this moment possible," he contends.

Sainz adds that Human Rights Campaign has long "made the business case for equality," adding that all staffers pay attention to whether leadership "walks the walk," not just LGBT employees. Referencing an idea from Creative Class Group’s Richard Florida, he adds that stigmatization in the workplace can be "corrosive" because employees want "open, diverse, encouraging, and empowering" places of business.

We’ve reached a tipping point in this country where it’s cool to be supportive to gay people and issues important to us," Sainz explains. "It is the moral imperative and has a halo effect to straight counterparts that transfers to corporations that support our community on these issues."

Nonetheless, he says the sheer scope of companies and organizations spanning the retail, technology, and healthcare spaces stepping up on this issue left its mark.

"The powerful part is that policymakers ignore these companies at their peril because it’s not just the business sector that it speaking out, it is the entirety of American corporations expressing their resolve," Sainz adds. "This tells you that our advocacy efforts have been smart and purposeful and effective. We’ve worked to get to this moment."

Lessons learned
Of course, not every well-intentioned campaign works. Starbucks’ recent Race Together initiative, in which baristas would write the hashtag #RaceTogther on cups and were encouraged to discuss race with customers.

Although the initiative was largely portrayed as a flop in the media, the company contends that the ongoing campaign is much better than just employees writing on customers’ cups.

In late March, CEO Howard Schultz released a letter to employees in which he acknowledged criticism, thanked them, and said Starbucks is "learning a lot" in the process. It notes that the chain "didn’t expect universal praise," but the decision to move forward with the effort hinged on the importance of "starting this dialogue."

Jim Olson, VP of global corporate communications at Starbucks, says the company has "a longstanding mission statement to inspire and nurture the human spirit in everything we do." He notes it has offered healthcare to staffers, reimbursed college tuition, and requested that guns not be carried into stores, to name a few issues.

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