Should corporate leaders take a stand on issues involving religious freedom or transgender laws?

In the past few months, a number of states (Indiana, Georgia, Mississippi and Georgia) have passed or attempted to pass laws that allow companies to withhold services from people somehow identified as LGBT. In response, many corporate executives of major companies doing business in these states have exerted pressure on the politicians to veto or substantively modify these laws. Because of these high-profile moves, there have been several articles including a recent Wall Street Journal article, “Transgender law spurs more rallies in North Carolina,” that discussed this new corporate activism, and some of the commentaries suggested that it was inappropriate for business to get involved with “moral” issues. First, let me be clear. From my perspective these laws legalize discrimination in ways similar to the ways Jim Crow laws legalized past discrimination.  There is no reasonable legal of moral justification for bigotry. But the question I want to explore isn’t about the laws themselves but about the issue of corporate leadership. Should leaders of corporations oppose these laws? My response is an emphatic “Yes!” They should oppose these laws for reasons ranging from the most narrowly practical to the commitment to a greater purpose that is the foundation of being a great leader. Starting with the most narrowly practical, picture two business situations that occur commonly in most organizations – a national or global team meet at their company offices in one of these states and they go out for a team dinner or you want to entertain a customer at a company office that is located in one these states by taking them out for a dinner.  Now picture the scene where the owner or manager of the establishment says, “I will serve three of you because you seem straight to me, but I won’t serve the other four because you seem gay.” Such discrimination is permitted under these laws by anyone claiming a religious belief, but that is just plain wrong. Putting aside the ridiculousness of the “you seem” criteria used to make this choice, it does great harm to your team and/or your customer relationships to encounter such discrimination and not react.  No executive in his or her right mind would expose anyone in their organization to this possibility because of its destructive impact on the coherence of the organization. Taking a little bigger view, these articles all mention that such discrimination has an indirect impact of their brand particularly for millennials who are both potential talent and customers. I recently wrote a blog post about the “millennial fallacy” in which I argued that millennials are actually driven by a desire to achieve a meaningful purpose. Part of this purpose is inclusiveness. Organizations that accept such discrimination are seen as the antithesis of inclusion and risk alienating their future workforce and customers. Similarly, several months ago I wrote a blog post about my trip to Portugal titled, “Would you rather work in an atmosphere of enlightenment or repression?” where I contrasted the era of innovation that occurred when there was religious tolerance versus the stagnation that occurred with religiously sanctioned dogma. And just a few months ago I wrote a blog about the importance of diversity of thought to innovation “Why having a diverse workforce is important and how to make it happen” and I didn’t limit the discussion to ethnic diversity — all diversity is good for innovation. So when we look at these laws, we can safely predict that companies in these states are likely to see both a decline in their talent pool, their energy and innovation and of their customer base. Finally, as I have often said, the single most important factor in successful leadership and creating a high performing organization is having a collective compelling purpose. The definition of purpose is always about creating a greater social good. Certainly the notion of the “collective” purpose is inclusive but we never really defined if the purpose itself needed to be inclusive.  What we’ve observed in our work at Cerebyte is that every compelling purpose written by a star leader was highly inclusive and being inclusive seems to be a fundamental part of achieving greatness as a leader and an organization. Now if we link the notion of inclusive purpose to promoting innovation, we find that inclusiveness of purpose produces more innovation and better team work. I suspect that this ties into some of the neuroscience of brain function where inclusion releases positive neurotransmitters associated with social support mechanisms and exclusion stimulates portions of the brain associated with fear.  In turn, this neural impact effects the organization as a whole where people want to be part of something that is an inclusive social good. Given all of these factors, leaders MUST resist such laws or they are derelict in their fiduciary responsibilities. It is just plain good business to resist these laws. But, I would hope all of us would go beyond it being just “good business” and recognize that bigotry in all forms – including so-called religious justifications (just think of some of the heinous organizations currently using religious justifications) — is morally reprehensible and should be resisted. What are your thoughts on this topic?]]>