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Faculty Viewpoints

Is Your CEO a Champion of Values—or a Pretender?

Prof. Jeffrey Sonnenfeld, an expert on leadership, writes that events of the last few years have helped illuminate which top executives have the courage to take a stand based on principle.

An Olympic podium

Regien Paassen/

  • Jeffrey A. Sonnenfeld
    Senior Associate Dean for Leadership Studies & Lester Crown Professor in the Practice of Management

Recently, JPMorgan’s Jamie Dimon and Blackstone’s Steve Schwarzman pulled out of a major Saudi showcase conference in the aftermath of the implication of Saudi leadership involvement in the murder of a Washington Post columnist. These and other business leaders have found a voice, filling a void left by political leaders, but the stances vary widely depending on values, courage, and character.

The Champions are values-driven leaders who take a courageous and independent stand on principles. Ken Frazier of Merck, Bob Iger of Disney, Paul Polman of Unilever, and Meg Whitman of HP promptly condemned President Trump’s equivocation of the characters of violent hate-promoting Nazi rioters with those of peaceful protestors following Charlottesville. Frazier told me, “I had to take a stand in support of basic American values. Each business leader has to think about his or her legacy and that requires proactive steps.” He informed his board that he was leaving the President’s American Manufacturing Council out of personal conscience, but that the company’s values were their decision.

Similarly, Ed Stack, the CEO of Dick’s Sporting Goods, didn’t await a referendum before pledging to stop selling assault-style weapons and high-capacity magazines and to require age limits for gun purchases and call for universal background checks. “The Parkland murders of kids had a profound effect,” he said. “I hadn’t cried so much since my mother passed away. We failed our kids and I am pissed—we sold the shooter his gun.” Delta, Walmart, and UPS soon instituted parallel policies.

The Stewards follow only after widely shared sentiment emerges. These CEOs feel that they have custodial duties and should not inject their personal values into decisions that impact others’ investments.

An argument can be made for caution when making business decisions based on principles. Yet, there are times when what might be best for the bottom line is simply not acceptable.

For example, Larry Fink explained BlackRock’s withdrawal from the Riyadh summit as a “hard decision,” stating: “It is a good example of the social pressures impacting companies. We do business with families, the kingdom and the government. We have been there 15 years. We don’t know who was responsible for the murder. We are dealing with family offices and the social security funds—our future business with them is something I am not ashamed of.” His defense of BlackRock’s anomalous passive ownership of major gun manufacturers in its index funds was similar: “We have clients who are pro-gun and anti-gun—so we give them funds with choices.”

The Pretenders display gross inconsistency between their words and their deeds. The sharpest examples of this are in the tech sector. Facebook’s Mark Zuckerberg and Sheryl “Lean in” Sandberg suppressed covert infiltration of the 2016 presidential campaign—while denying there was any such risk. In 2007, Yahoo’s Jerry Yang proclaimed, “We’re all focused on protecting and promoting free expression and privacy,” even as his company revealed the identities of Chinese dissidents later imprisoned by the government. In 2016, Apple’s Tim Cook famously refused to help the FBI crack the encryption of a terrorist’s government-owned phone. Yet, in 2018, Cook dutifully complied with far more intrusive new Chinese cybersecurity laws.

An argument can be made for caution when making business decisions based on principles. As Conference Board CEO Steve Odland, former CEO of Office Depot, warns, “By supporting one aspect of politics, you’re by definition going against some of your other constituents. You have to be very careful as a CEO.”

Yet, there are times when what might be best for the bottom line is simply not acceptable. Today’s leaders need to know the difference—and have the courage and conviction to act. As Robert Frost advised: “Freedom lies in being bold.”

Department: Faculty Viewpoints