How Yale professor Jeffrey Sonnenfeld pushed companies to pull out of Russia
“So many CEOs wanted to be seen as doing the right thing,” Sonnenfeld, 67, said in a phone interview. “It was a rare unity of patriotic mission, personal values, genuine concern for world peace and self-interest in business.”
“What these lists do is give courageous CEOs the confidence to carry on, and courageous aspirants the reinforcements to tend to their boards of directors so that they present themselves as responsible business leaders when ‘They may see a rush of their peers leaving Russia,’ Sonnenfeld said. .
The list, updated hourly by its research team, grew to more than 330 on Friday. Its latest list began with a dozen companies spanning oil giants BP, Shell and ExxonMobil, consulting firms McKinsey, Bain and BCG, and big tech companies IBM, Dell, Meta, Apple and Alphabet, just after the invasion of Ukraine on February 24.
Many companies pulled out in response to employee outrage over corporate exposure to Russia, leaving billions in assets and revenue on the table, he said.
Sonnenfeld said the “latecomers” followed this week, when the PR arms of more than two dozen consumer products, fashion, fast food and packaged goods companies contacted him in a single day to be included.
The list’s rapid growth in contrast to Sonnenfeld’s earlier efforts could be explained as an economic move amid growing instability in Russia, or as a sign of US public support for a tough stance against Putin. A large bipartisan majority of Americans support sanctions on Russia for its invasion of Ukraine, according to a Washington Post-ABC poll.
But while the number of people seeking to join the list goes on, the Sonnenfeld team tries to categorize exactly how companies are reducing their business activities in Russia. His team planned to divide the list into three buckets: companies that closed their operations in Russia, those that temporarily suspended them, and those that made cosmetic promises about future investments without changing their operations.
“The public no longer knows who to celebrate and who to shame,” Sonnenfeld said. Yet some critics argue that even corporate activism with the best of intentions can jeopardize democracy.
Vivek Ramaswamy, entrepreneur and author of “Woke, Inc.”, sees corporations cynically weighing in on “whatever is politically most practical to achieve their goal of aggregating power,” be it voting rights , Black Lives Matter, climate change or Ukraine.
“It signals to ordinary citizens that their voices do not count in the same way as those who wield market power when settling a moral issue,” Ramaswamy said. “Whether it’s truckers in Canada, protesters in Western Europe, or people attending rallies in the United States, they’re saying we deserve to be heard as much as a CEO sitting in a office corner.
Since he was a doctoral student interviewing corporate executives imprisoned for price-fixing, Sonnenfeld has focused his research on corporate social responsibility. That was in the late 1970s, long before a powerful group of CEOs known as the Business Roundtable in 2019 distanced themselves from the idea that companies should above all else maximize profits for shareholders.
As a young professor at Harvard Business School, Sonnenfeld wrote his first book, “Corporate Views of the Public Interest,” about the broader role of business leaders in society. In the 1980’s, Sonnenfeld said the withdrawal of 200 Western companies from South Africa in protest against apartheid had galvanized him. He recently argued in a Fortune column that boycotts should provide a “powerful roadmap for why and how CEOs should affirm American values in the face of global challenges.”
He launched the first school for CEOs in his thirties, amid skepticism from senior professors at Harvard Business School that leaders would want to spend their time listening to each other. He moved the company to Emory University in Atlanta in 1989, where he began regularly organizing powerful gatherings of business leaders to address the social issues and business challenges that kept them awake at night.
Former Atlanta Mayor Andrew Young, a civil rights leader alongside Martin Luther King and former ambassador to the United Nations, told CEOs at an early Sonnenfeld forum that business has more influence on the right thing that clergymen or activists. “He was my inspiration,” Sonnenfeld said.
Since then, Sonnenfeld has regularly brought business leaders together to take a stand. Business Insider dubbed him the “CEO Whisperer.” After the 2018 Parkland school shooting, leaders discussed their plans to sever ties with the NRA and promote gun safety.
In a meeting days after George Floyd was murdered by Minneapolis police in 2020, Kenneth Frazier, then chief executive of pharmaceutical giant Merck, personally explained that Floyd could easily have been him if someone hadn’t invested in him. Sonnenfeld said the conversation prompted CEOs to hold town hall meetings with employees to discuss how to promote racial justice.
On Jan. 5, 2021, the day before President Donald Trump’s supporters attacked the Capitol, Sonnenfeld brought together nearly six dozen CEOs in a virtual meeting amid growing fears that Trump was interfering with the transfer of power.
The Post had just published the transcript of a call to Brad Raffensperger, Georgia’s secretary of state, in which Trump repeatedly urged Raffensperger to change the outcome of the state’s 2020 election. The CEOs discussed suspending donations to members of Congress who said they would not certify votes for President Biden.
At another Sonnenfeld meeting, held on Zoom last April, two black executives, Frazier and Ken Chenault, former chief executive of American Express, launched their campaign to get their fellow CEOs to sign a letter opposing the restrictive voting rights bills being considered in dozens of states. . Hundreds did so in full-page advertisements in The New York Times and The Washington Post. Republican leaders ridiculed them as “woke CEOs.”
Sonnenfeld said he received death threats. Skeptics said business leaders are overstepping their bounds when they engage in political debates.
“The purpose of a corporation is to produce a superior good or service at a fair price,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware. “When you go beyond that in the service areas, it affects the core mission of the business itself, as it is naturally divisive whenever a CEO takes a stand. Inevitably, you lose customers, you lose employees, or you upset investors.
Some activists have decried the companies’ efforts as too little, too late. The Georgian bill had already been enacted. Lawmakers in Florida and Texas have also approved legislation imposing new voting rules and new penalties for those who break them.
“They literally did it a day late and a dollar short,” said Malia Lazu, an entrepreneur and former bank executive who teaches at MIT’s Sloan School of Management. “If they were really willing to stick their heads out and take a little more risk, they would have come out strong four weeks earlier when the militants called on them to join the fight.”
The suffrage campaign was Sonnenfeld’s most high-profile effort to date. Its next forum will take place in Washington in March. 21. At the top of the agenda is General Mark A. Milley, Chairman of the Joint Chiefs of Staff, who will speak on the corporate response to Russia. “Fortifying world peace, just like fortifying democracy, is absolutely part of the duty of corporations,” Sonnenfeld said.