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CEOs weigh risk, reward of serving on White House councils

Key Points
  • CEOs on White House advisory councils must decide whether to continue to work with the administration in an official capacity.
  • For the executives, keeping their roles risks alienating employees, customers or clients.
  • But leaving these positions may prompt a disparaging tweet from President Donald Trump.
Will more CEOS walk away from Trump?

Of the CEOs and industry leaders who have resigned from the White House's manufacturing council this week, several have found themselves on opposing sides to the president before.

For instance, President Donald Trump described pharmaceutical companies' pricing tactics as "getting away with murder," and his tough stance on immigration has created an antagonistic relationship with the technology companies.

But the resignation of Scott Paul, the president of the Alliance for American Manufacturing, might not sit so easily. Paul's organization promotes U.S. manufacturing jobs, particularly in the steel and aluminum industries – and the White House's focus on restoring old-line manufacturing, as well as recent attempts to crack down dumping these products in the U.S. would seem to directly align with their objectives.

Paul tweeted, simply, that resigning was the "right thing to do," making no specific mention of the Charlottesville, Virginia, violence. The president's response in the wake of it was the last straw for leaders like Merck's Ken Frazier, Intel's Brian Krzanich and Under Armour's Kevin Plank.

President Donald Trump
Jabin Botsford | The Washington Post | Getty Images

And it's not just customers or employees they're sending a message. Steph Curry, star guard for the NBA champion Golden State Warriors and the highest-profile athlete on Under Armour's roster, tweeted a series of applause emojis after Plank's announcement. In February, Curry issued a sharp rebuke when Plank talked up the president's business bona fides on CNBC.

GOP strategists say the president's withdrawal from the Paris Accord in June was the first watershed moment that emboldened advisors such as Tesla's Elon Musk and Disney's Bob Iger to quit the president's advisory bodies. At the time, Intel and Under Armour released statements that they were "disappointed" in the decision, but it was the Charlottesville response that fueled the momentum.

"There's strength in numbers," said Kevin Madden, a partner at Hamilton Place Strategies and former spokesperson for Mitt Romney's 2012 presidential campaign.

The forceful resignation of those companies has forced others like Johnson & Johnson and Wal-Mart – which condemned the violence, recognizing other leaders' personal conscience, but chose to stay "engaged" – to explain their rationale or risk alienating employees, customers or clients.

"Gone are the days where you can hope for the issue to go away or expect that you won't be called upon to stake out your position one way or another," Madden said.

Some companies quietly welcome the opportunity to cede their unofficial role defending the administration and an unwanted spotlight in order to focus on day-to-day business.

A political advisor close to the White House described the level of engagement between the White House and chief executives "episodic," noting frustration within C-suites that the White House hasn't put policies discussed in listening sessions into practice, outside of energy and old-line manufacturing issues.

"There's a certain degree of dread when either the CEO or the senior government affairs people see 'unknown' on their phone," said the advisor, who requested anonymity to describe confidential clients' reactions, referring to the unlisted telephone numbers from which White House officials call.

A technology executive who has visited the White House but does not serve on a particular council said the meetings serve as a helpful way to raise issues to the highest level, but the real rubber meets the road when the company follows up with career staffers in a certain department to affect the suggestion. A financial services executive who has visited the White House in the past said he'll tackle invitations on a case-by-case basis.

For those choosing to stay in official roles visiting what the president calls the "boardroom," it's unclear what they'll receive. The council forged early deadlines for task forces on regulatory issues but hasn't outlined its objectives since.

Perhaps they'll dodge a mean tweet from the leader of the free world. Perhaps government contractors – like Lockheed Martin – won't lose their seat to a competitor like Northrup Grumman, that's not currently represented.

Or perhaps there's a specific near-term goal for companies like 3M and Whirlpool, which rely on the North American supply chain as NAFTA gets rewritten, beginning imminently.

By CNBC's Kayla Tausche. Follow her on Twitter:

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