SIE Siemens AG

By Chip Cutter 

Before the chief executive of the industrial conglomerate Siemens AG spoke out on the rise of a nationalist anti-immigration party in Germany, he reached out to employees on the company's internal social network.

"What do you think?" the CEO, Joe Kaeser, asked workers. "Should I get engaged in social matters?"

The response was clear: Nearly 89% of employees surveyed voted in favor of Mr. Kaeser sharing his views on political matters, he said Tuesday, a response that highlights the changing nature of the job of a top executive. Siemens employs about 385,000 people globally.

Corporate leaders today must increasingly walk a fine line, serving shareholders while also speaking out on potentially fraught political issues ranging from immigration to gun control, said Amy Borrus, incoming director of the Council of Institutional Investors, which represents large investors. Many employees and customers now look to corporate leaders for their views, she said, though sharing can be perilous.

"Every time you speak out," Ms. Borrus said in a morning session of The Wall Street Journal's CEO Council meeting, "you risk getting slammed because some of your customers, some of your employees, disagree."

Mr. Kaeser has been outspoken on a range of issues in the U.S. and abroad. He has criticized U.S. immigration policies and taken on President Trump, saying earlier this year he was concerned that the "most powerful office in the world is being associated with racism."

After the anti-immigration Alternative for Deutschland party, or AfD, won support in a 2017 German election, Mr. Kaeser talked about the complacency of German's elites and made comparisons to the rise of Hitler's Nazi party in the 1930s. Mr. Kaeser said Tuesday he saw a duty to speak out, and said executives must explain their business decisions to employees.

Many executives say they increasingly must serve a range of stakeholders beyond investors. Earlier this year, the Business Roundtable changed its statement on the purpose of the corporation, noting that companies should look beyond shareholders to also consider their impact of their decisions on employees, customers and the community.

Speaking in the audience at the Journal's CEO Council event, the advertising executive Sir Martin Sorrell, executive chairman of S4 Capital, said the Business Roundtable statement struck him as in parts "greenwashing," and said that if companies invest in the long-term, they will naturally consider all stakeholders and "everything fits neatly into place."

Still, choosing how to speak out isn't always clear. Ms. Borrus said executives must pick their issues, reflecting on those that are relevant to the company, and said private companies have more leeway.

As corporate leaders go public with their views, employees also are becoming more active, pushing back against business decisions. Employees at companies such as Alphabet's Google have walked out on the job in recent years, and workers at Google and other tech organizations have protested Defense Dept. contracts and other business.

Ms. Borrus questioned whether the rise of activism inside American corporations would continue in a different economic climate. "We'll see what happens come the recession when jobs aren't as secure," she said. "Will there still be this same employee push?"

(END) Dow Jones Newswires

December 10, 2019 11:54 ET (16:54 GMT)

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