President Donald Trump's response to the white nationalist rally in Charlottesville, Va., initiated a mass exodus of CEOs from his executive advisory councils and elicited more public statements from corporate leaders than the public has grown to expect. The events raised questions about the traditional dynamics between the president and the business world.
Presidential council appointments are usually nominally influential roles that, at best, may capture the president's ear, and at the least function as a mark of prestige for those appointed. However, Mr. Trump's controversial comments and actions made proximity to the White House a potential liability. Some contend his refusal to condemn neo-Nazi and white nationalist protesters by name emboldened these views, and executives not associated with the administration made public statements distancing themselves from the president.
In his recent New York Times column, James B. Stewart outlines how perspectives on Mr. Trump have shifted among the business community since his inauguration, perhaps best exemplified by comments made by Charles Elson, JD, a professor and director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. The standard line for CEOs has traditionally been to stay away from definitive political statements to avoid alienating shareholders, politicians or the general public.
"Chief executives don't have the luxury of ventilating their personal political opinions, whatever they might be," Mr. Elson told The New York Times. "They shouldn't let their personal views influence their business decisions. If they really feel strongly about something, they can always resign and then say whatever they want."
However, while some CEOs may have quit Mr. Trump's council "as a matter of personal conscience," as Merck CEO Ken Frazier said, the decision may also be motivated by business concerns.
"At some point, if identification with the administration becomes so polarizing that it impairs your ability to run the company," Mr. Elson said, "then you may have to do something."
Mr. Trump disbanded the American Manufacturing Council and the Strategy and Policy Forum Wednesday, though the Strategy and Policy Forum had officially disbanded during a conference call before Mr. Trump tweeted his decision. Apart from changes to the councils, several CEOs released public statements either disapproving the president's comments or reaffirming their commitment to civic values.
Mr. Elson also pointed out that, even during the most controversial periods of President Richard Nixon's tenure, when protests over the Vietnam War fractured the nation, business leaders did not avoid White House alliances.
Whatever their motivations, it is clear that this recent episode has normalized CEO transparency to a degree that was previously unheard of in other political climates. This shift does not only change what is considered acceptable conduct, but raises expectations for CEOs to function as influencers who are not afraid to publicly take stands on social issues.
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