Corporate boycotts expose an awkward truth

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Brian Adam
Professional Blogger, V logger, traveler and explorer of new horizons.

Boycotts can work. See what happened to Montgomery, Alabama, public transportation in 1955, when black commuters stopped taking buses for more than a year to protest segregation. Or in Bristol eight years later, because of the refusal of the local transport company to hire black workers. The recipe: a large number of customers willing to make short-term sacrifices, and businesses that could not function without the money they brought them.

What if companies boycott each other? For example, Facebook advertisers, who say it doesn’t do enough to remove racist content. It’s tempting to think that the spirit of Montgomery has revived in Menlo Park (California), Facebook’s headquarters and that racial justice has risen to the top of the boards’ agendas. contrary. Corporate attacks like this are, at best, a snag for a firm like Facebook … and at worst, a marketing opportunity for those involved, who distract from efforts that can drive real change.

Intercompany boycotts face big problems. Not many brands can really abandon a social network that accounts for perhaps a fifth of global digital advertising. Sure, they don’t want to appear alongside hateful content, but there are other, less public ways to do it. Advertisers may ask not to appear alongside certain keywords, such as “protest,” “gay,” “fat,” and “black people.”

The idea that self-interest prevails should not be surprising. Most companies are not prepared to be a moral example or to create social change that hurts their profitability. Executives and directors have a responsibility, often legally established, especially before the shareholders. Verizon was one of the large companies to withdraw its YouTube ads in 2017. Returning once was able to better control where they were published.

Furthermore, capitalism has its own problems with race. Of personal wealth linked to corporate stocks in 2016, only 3% was held by black households, according to Fed and census data, and those households held only 2% of the wealth in mutual funds that buy stocks and bonds. . Since 2015, large US companies such as Facebook, Citi, Apple and Starbucks have faced 60 shareholder votes challenging them to report more on diversity or tighten their policies, according to Proxy Monitor. All but two failed.

There are two exceptions. One is companies where the boss has unusually free hands. That would include JP Morgan chief Jamie Dimon, who has knelt in a strategic photo, or Patagonia billionaire owner Yvon Chouinard. It could also include Ben & Jerry’s, which is part of Unilever but has considerable autonomy. For some brands (especially those like The North Face, run by the wealthy) not advertising can even be a way to sell more and more expensive.

The other counterexample is … Facebook. His $ 60 billion in cash and the like is enough to cover his expenses for a year, so losing some income is not a disaster. It is so dominant that its users cannot go anywhere else. More importantly, Mark Zuckerberg’s prodigious wealth and voting control mean that you don’t need to worry about what other investors think if doing so interferes with your approach to creating a growing online community.

That makes Facebook a terrible target for boycotts, but it also means that if Zuckerberg himself decides to become an activist, he would be a force to be reckoned with.

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