The CEO conundrum: How and when to speak out against Trump


In just 10 days in office, Donald Trump has forced corporate America to rip up the rule book for dealing with a sitting president.

Top CEOs tend to err on the side of caution dealing with any president. But Trump's move to ban travel from seven majority-Muslim nations to the United States and his tendency to favor trade tariffs and attack individual companies by name has forced corporate America to consider taking more aggressive stands.

Already the list of companies whose CEOs have criticized Trump's travel ban include Ford, Google, Facebook, Tesla, Goldman Sachs, JPMorgan, GE, Starbucks, Citigroup and others.

President Donald Trump holds up one of the executive actions that he signed in the Oval Office on Jan. 28, 2017, in Washington.
Getty Images

These chief executives made the decision that staying silent on Trump's order, which led to widespread chaos at American airports, was a bigger risk than defying a president who is known for taking direct and brutal aim at all critics. The risk for companies is that employees, shareholders and customers could punish them more for silence than Trump could either with his tweets or executive actions.

This is likely just the start of a significant corporate backlash against Trump if his approval ratings stay low and he continues to take actions that threaten companies' ability to attract top talent and hold onto consumers now empowered to take direct action through social media.

The responses are likely to vary greatly by issue and industry. On trade, multinationals will eventually have to take on Trump directly as he threatens to disrupt their global supply chains by imposing tariffs or ripping up agreements like NAFTA.

There is little doubt this kind of action is coming. One of Trump's top trade advisors, Peter Navarro, told the Financial Times that the White House's goal is to blow up global supply chains and get American companies to use American-made components.

But the biggest current threat is to the technology industry which relies heavily on foreign-born and American-educated talent and tends to employ a progressive workforce that could revolt at signs of capitulating to Trump. That's why Google, Facebook and others have been at the forefront of corporate resistance to Trump.

"Tech companies in particular need talent and that talent is coming from abroad. It's not about the ban from seven countries," Eurasia Group's Ian Bremmer told me this week. "This is about creating an environment where America is no longer seen as an attractive place to live for a lot of people these companies really need to have."

But decisions on how to deal with Trump will extend well beyond the tech space. Inside boardrooms across the country executives are debating when and how to speak out against the White House.

The issue is made even more complex by the fact that much of corporate America likes some of the broad thematics of Trump's approach including lower taxes and fewer regulations.

The corporate world prefers stability and order and what worries them are signs of instability on the horizon.
Top corporate consultant

"The corporate world prefers stability and order and what worries them are signs of instability on the horizon," one top corporate consultant told me this week. "A lot of the policies or executive actions will lead to some level of chaos. People are willing to give the White House some time to demonstrate that they understand the restraints of the system while also protecting their immediate interests. If [Trump] stays this unpopular people aren't going to be that afraid of him for long."

The days when executives could simply hunker down and ride out any controversy are long gone. Uber faced a swift backlash after some Twitter users criticized the company for still giving rides from JFK airport after taxis refused to do so in the wake of Trump's travel ban. Angry consumers also ripped Uber CEO Travis Kalanick for serving on Trump's business advisory team. L.L. Bean took a beating after Trump tweeted his thanks to company heiress Linda Bean for his support.

The rapid nature of customer response has left CEOs without the option of staying silent on Trump.

"There is a real issue now around empowered consumers and how people react in a new way to the public postures of CEOs. We have a consumer that until recently may have felt powerless. But now they are very empowered through social media," Nancy F. Koehn, a professor at Harvard Business School told me. "And there is an extra burden on CEOs to come to serious terms with all this with their boardrooms and their employees and figure out, 'What is our stake here?' And it's not going to be easy to navigate on a point by point basis."

— Ben White is Politico's chief economic correspondent and a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.