World Economic Forum Global Technology Governance Summit - Salesforce’s Marc Benioff on corporate activism, Stakeholder Capitalism and challenging voter suppression

Profile picture for user slauchlan By Stuart Lauchlan April 7, 2021 Audio version
Summary:
The original 'Activist CEO' or an avatar for his employees concerns? Salesforce CEO Marc Benioff reflects on the rise of Stakeholder Capitalism.

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I believe business is the greatest platform for change. I believe that CEOs really have an opportunity, using their businesses, to improve society. That could be directly, making a commentary to politicians, building great products or making sure that their companies are net zero - I think in all of those cases, businesses are improving the state of the world.

So said Salesforce CEO Marc Benioff in conversation at this week’s World Economic Forum Global Technology Governance Summit, but it’s a sentiment that we’ve heard him express many, many times over the years - he even wrote a book about it! - and it’s a mindset that has won him the label of ‘Activist CEO’. That’s actually a term that he once told me he didn’t much care for, although it’s a mantle about which he appears to have become more accepting over the years, defining it in his own terms, as above.

That said, it’s scarcely difficult to see how that activist branding has become attached both to Benioff personally and to the company he co-founded over two decades ago, a whole other world in societal and political terms. During its growth, there’s been a willingness on the part of Salesforce to engage in highly-public stands on issues that have split America - and as such could be assumed to divide both the existing and putative customer base, a high risk policy for any business.

Most famously, Salesforce took a ‘line in the sand’ position on LGBTQ rights in the likes of Indiana and Georgia where discriminatory laws, mostly hinging on bathrooms as pretext, were being put in place. Salesforce used its economic clout to bring the architects of such legalized bigotry back to the table to modify their plans. As Benioff recalls it:

In the case of Indiana, where there were laws being signed that constrained and started to discriminate against the LGBTQ community, our employees said to me, 'Hey Marc, you have a responsibility to go out there and use the power of the company that collectively we have and have it changed'. We negotiated with the Governor and we had that law changed. We found a mutual resolution. You can see that in lots of places in the world, in the United States, but also in other countries, companies can have a role in shaping policy and expressing their pleasure or displeasure with certain policies.

That’s a far cry from standard corporate thinking and practice when Benioff went to business school back in the 1980s, at a time when politics was up there with sex and religion as topics not topping the corporate agenda. I remember once Oracle’s Larry Ellison, one of Benioff’s acknowledged mentors, jokingly telling me when I asked him a cheeky question on his political opinion that, “I don’t believe in democracy!”, at which point we both chuckled and went back to talking about relational databases, a far more appropriate topic for the time.

But that time has passed and the rise of the ‘Activist CEO’ - sorry, Marc! - has changed the rules on what’s fair game for discussion and questioning. For his part, Benioff’s own political leanings have been increasingly bi-partisan over the years. Originally a Republican, he served as co-Chair of the President’s Information Technology Advisory Committee for George W. Bush, but hosted Barack Obama on the election trail at the Salesforce offices. He made no secret of his backing for Hillary Clinton over Donald Trump, but managed to persuade the eventual victor to support his firm’s global tree-planting climate change initiative.

And whenever asked about whether he has his own political ambitions, Benioff has demurred, while, as of last year, since becoming the owner of Time magazine, he’s stated that he isn’t making any more financial contributions to political candidates for office.

(Too) great expectations

But the activist label remains attached to both him and Salesforce and with that comes great expectations. As diginomica has noted previously taking public stands on controversial issues comes at a price. Critics carp about supposed double-standards - if you’ll object to anti-LGBTQ rights in Indiana, how can you do business around the world in countries with their own appalling track records on the subject? You stick your neck out on a topic, expect it to be chopped off if you’re deemed not to hold everyone, including yourself,  to the same standard.

The prime example of such criticism for Salesforce came in 2018 when it signed a contract with  US Customs and Border Protection (CBP) at a time when the Trump administration was under fire for images of children locked up in cages in detention centers. The Salesforce contract was stated as being for modernizing CBP’s recruitment processes, but it was a case of ‘guilt by association’, leading to unrest among Salesforce employees as well as protests from activists, including disruption of Benioff’s keynote at the 2019 Dreamforce.

In that instance, the employee unhappiness was particularly notable - and double-edged. On the one hand, it was indicative that Salesforce had fostered a culture where such protests could be confidently aired to the CEO; on the other hand, the message was that the company had let down a tranche of its staffers. That’s got to hurt when in fact, Benioff’s argument is that his own supposed activism is in fact him acting acting as an avatar for his team:

It's really driven by the employees...it's not me. I'm just acting on behalf of my employees. They make a case. We're one team. I'm not making some unilateral decision. I'm trying to take their voices and their energy and channel it as they want me to. I think employees today are really the true activists...You can see it in my industry, where the employees have a voice and a role and are able to say things that have action in ways that maybe previously they could not. That's really where we are. To that point, CEOs have a responsibility to listen to their employees and then act on their behalf.

Georgia on his mind…again

Activist responsibility has come to the fore again this month thanks to events in Georgia, one of the most disputed of swing states in the 2020 US Election, with Joe Biden winning the vote as Black electors turned out in record numbers. Trump launched one of his many failed legal actions to overturn the result, based on false claims of election fraud, even trying personally to persuade Republican Governor Brian Kemp not to certify the electoral results.

While Kemp refused to do this, he has signed a 98-page bill, the Election Integrity Act, into state law, a piece of legislation that opponents say will limit absentee voting and is expected  to disproportionately depress voting by communities of color. It limits the number of drop boxes for absentee ballots, requires voters to provide state identification to get absentee ballots and even bans people from passing out food and water within 150 feet of a polling site, including to those standing in line to cast ballots.

Salesforce, which has one of its famous Towers in Atlanta, has been at loggerheads with Georgia’s legislators before, again over LGBTQ discrimination, but as with Indiana, it reached a consensus accommodation. Prior to Kemp signing the new voter law, the firm had voiced its opposition to the proposals in the bill, stating on Twitter that it would threaten “trustworthy, safe & equal access to voting by restricting early voting & eliminating provisional ballots”.

Since the signing by Kemp, corporations have become increasingly vocal in their protests, with executives from 170 companies - and counting - signing a public commitment to protect voter access, not just in Georgia, but other states across the US, such as Arizona and Texas, where similar legislative pushes are underway.

In Georgia itself, the most significant protest action to date has been the decision of Major League Baseball (MLB) to pull its All Star Game out of Atlanta. What happens next remains to be seen in terms of how far other organizations are prepared to go in terms of continued engagement with the state. For now, Benioff says:

Voting is the foundation of our democracy and everyone is entitled to their vote. We should encourage and have everyone legally voting as often as possible in these elections, so that our democracy can continue. I think that's extremely important and so I'm in favor of the activism. I think it's important that these companies and these individuals realize that they have a voice and that companies do have a role in making a statement. I'm all for what the Major League Baseball did. They made a clear statement that they don't support it, they gave it a thumbs down, and of course Salesforce gave it the same thumbs down before the vote happened.

Taxing questions

It is a sign of how far the notion of Stakeholder Capitalism has come in recent years that it is to corporations that people look for an ethical, moral and increasingly political lead, disillusioned by the real political establishment’s shortcomings. Benioff earlier this year aired his view that CEOs had been among the heroes of the COVID crisis of the past year. But with such status, as noted above, comes increased scrutiny.

Amazon founder and Chief Executive Jeff Bezos just came out in favor of raising US corporate taxes in line with plans by the Biden administration. It’s a bold declaration and one that will again throw a spotlight on the company’s own global tax affairs, for so long the subject of huge criticism for years. It also comes a few days after Salesforce was itself named by a non-partisan think tank, the Institute for Tax and Economic Policy, as one of 55 major publicly-traded US companies to have, perfectly legally,  paid no federal income taxes in 2020.

Salesforce has to date made no official comment on the think tank’s report, but when questioned at the Governance Summit on whether he’d endorse Bezos’ stand on tax reform, Benioff pointed to his firm’s push to pass Proposition C in San Francisco. This aimed to levy an average tax of 0.5% on gross business receipts over $50 million per year, with the money raised going directly to tackle homelessness in the city. It was a proposal that was vocally opposed by many tech firms in the Bay Area at the time, but it is an example, he argues, of how to tackle complex issues such as tax regime reform:

Homelessness became a major issue in San Francisco, so we advocated for Proposition C. That passed and that generates about $30 million a month in additional services for the homeless in San Francisco. We felt [the homeless problem] was starting to impede our ability to be successful, so we advocated for an additional tax.

I think that [in] the case where businesses believe, like Amazon believes and I think Salesforce also believes this as well, that it's appropriate to have increased taxes, that they should advocate for those taxes and they should make the case for why that is. I think in the case of the United States, we probably do need revisions and have conversations about what our tax rates should be, but we also have to balance that against the United States' ability and need to be competitive in the world. So whatever that final tax rate is, needs to be set in a competitive framework.

I'm in favor of looking at it with a beginner's mind and saying, 'Let's look at the tax rates and let's find the correct number and let's have a conversation and do it together'. So, mostly, I would say I'm in favor of what Jeff is saying, but at the same time I'm also saying, 'Let's also do it in the framework of competitiveness and global competitiveness’.

My take

At diginomica, we’re big fans of Stakeholder Capitalism - but nobody ever said it was going to be easy. As Benioff has noted, this sort of business mindset is still relatively new and there are going to be bumps in the road as decades of commercial practice are revisited and transformed. The events in Georgia and elsewhere in relation to blatant voter suppression is the latest battle to be fought, but it certainly won’t be the last. Benioff may not be keen on the Activist CEO title, but it’s an important responsibility to accept. Shaping a revolution in how business acts as a catalyst for positive change is a long game - and a long story to which we will be returning often.