“I didn’t leave the Republican Party. I felt that the Party left me.” –Ben Bernanke 
Bernanke’s comment came to mind with the serial departures of CEOs from President Trump’s business advisory groups. Robert Iger (CEO of Disney) and Elon Musk (CEO of Tesla) quit Trump’s Strategic and Policy Forum after the President’s abandonment of the Paris climate accord. Then, two days ago Ken Frazier, CEO of Merck, resigned from the American Manufacturing Council over Trump’s hesitation to denounce the racists and alt-right violence in Charlottesville last weekend. The CEOs of Under Armour and Intel resigned from the council later that day as did Scott Paul, the president of the Alliance for American Manufacturing. Yesterday, AFL-CIO President Richard Trumka bailed out.
Was this an easy or difficult decision for the departing CEOs? What about the CEOs who remain on those councils: what are they thinking? The issue has attracted pointed advice from Lawrence Summers: “Why don’t all CEOs quit Trump’s advisory councils?” In addition, Andrew Ross Sorkin asked, “How can people like Adebayo O. Ogunlesi, a director of Goldman Sachs and an infrastructure investor, remain a member … [and] remain silent?”
The dilemma for the remaining CEOs begs the larger question: under what circumstances would you quit a presidential advisory body? Suppose you know a CEO serving on such a council who feels a high dissonance between personal and presidential values; he or she comes to you for advice about whether to stay or go: what would you say?
First, ask, don’t tell. Most CEOs are smart and pragmatic: they can figure it out for themselves if engaged interactively. Here are some questions for the dissonant CEO:
1. Why did you join in the first place? Perhaps you were motivated by Duty to the country and to public service. And Washington is an endlessly fascinating echo-chamber that can provide interesting diversion from issues back at the company. Or perhaps self-interest plays a role: like Trump, you contemplate a campaign for national office and need some public service to show the prospective voters. Or maybe you joined for the good of the company. An advisory council might become an opportunity to influence the development of government policy related to your business concerns. It could boost access for you to the president and senior administration members. It can be important to have a place at the table when big decisions are made. Plus, it is awfully hard to say ‘no’ when the president extends an invitation: the prestige and ego gratification can be immense. On the other hand, your Fortune 500 Company probably already has a large government relations staff in Washington right now along with a small army of paid lobbyists. Are these people doing their jobs? If so, is your participation on this council truly a good use of your scarce time? The opportunity cost of your participation on the council must be a considerable concern.
2. Why did the president invite you? He told you that you are important and he really needs your help. Maybe you are a Republican and/or a campaign contributor and he appealed to The Cause that brought you together. But consider this: if the President really wanted your advice, he could pick up the phone and contact you any time. Did the President need you to join a council to get your ear? Realistically, the creation of the council and his invitation for you to join reflect two needs. The first is a political need: the president is the leader of a grand coalition to various subgroups of which he needs to signal affinity. By organizing a business advisory council, the president shows his proximity to the business-centric part of the Republican base. The second need is branding and positioning: by managing photo ops with the likes of Elon Musk of Tesla or Robert Iger of Disney or Kevin Plank of Under Armour, a president can bond to what is “cool” in the world of business, be it new technology, hot cars, better entertainment, or snappier clothing. In short, advisory boards are a means by which a president can appropriate some of the street cred of celebrity business leaders. Should a CEO want to provide this kind of reputational endorsement?
3. What is the purpose of the council? And how effective is it? Purpose and effectiveness link inextricably. Generally, the clearer the mission and sharper the focus, the greater will be the impact. But as the first two questions suggest, there are all kinds of motives for participants in such councils, enough to create gridlock, mission drift, and useless conversation. Is the council just about talk, or will it produce a report of some kind? Who will receive and respond to the report? Most importantly, who will lead this council and what processes will that leader follow? To be clear, special commissions and councils composed of volunteer (unpaid) citizens have had valuable impact on government policy (two good examples are the Rogers Commission to investigate the space shuttle Challenger disaster and the Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research). However, the best of efforts of some other groups have flopped. For instance, the Bowles-Simpson National Commission on Fiscal Responsibility and Reform produced a praiseworthy report to reduce the federal deficit that drew scant action. Does a CEO have time for a vague purpose or an ineffective outcome?
4. What is the source of dissonance? What (if anything) makes you uncomfortable about being on this council? Every CEO lives in a space that is simply flooded with conflicting interests. Dissonance is daily fare. Many issues might warrant your empathy, but only a few are likely to warrant your time and energy. How should one prioritize? If the dissonance arises from some conflict about deep values or purpose, one should pay close attention. For Fortune 500 CEOs, matters of diversity, racism, and violence certainly warrant such attention. Prominent companies openly espouse a commitment to diversity and inclusion. To stay silent when presidential behavior or policy contradicts that commitment would appear to excuse or endorse it. Setting a priority is never easy in the moment; but viewed over the longer term, the world you hope your children and grandchildren will live in, the priorities become clearer. How do you want history to judge you?
5. Can you possibly make a difference in influencing policy to be more consistent with your values? On the answer to this hinges the more profound question, Is the White House listening? By now, your answers to the previous four questions will shape your answers here. The opportunity for personal impact on issues of importance to you and your company is a common justification for not quitting in the face of dissonance. Even if you are the only dissident on the council, your voice might cause others to reconsider, get more information, or reach out to their own constituents. Giving your own feedback and criticism in the most direct voice possible might save the situation. Perhaps, if a report is to be rendered, you could issue a minority dissent report, much as Justices do on the Supreme Court. If, however, the council’s processes marginalize, ignore, or exclude you, it’s time to go.
6. What are the consequences if you quit? Perhaps no one at the White House will pick up the phone if you call about a problem. Perhaps someone went to bat to get you invited onto the council and now will feel burned. Perhaps the President will tweet criticisms about you. Perhaps the president’s ardent supporters will murmur that you’re a disruptive crybaby, who added nothing to the council’s work anyway—or the character assassination could be worse. But the odds are that the bad stuff will end quickly and that meanwhile you’ll get kudos from like-minded people. Quitting a president’s business advisory council may hurt like ripping off a Band-Aid, but doing so accelerates the healing. Similarly, you could consider the consequences if you stay. The longer you participate on the council, the more you are associated with the council’s outcomes and the president’s policies.
In theory, one has a third alternative: stay, but check out mentally and emotionally. Leave your name on the marquee but beg off from meetings, ignore the email stream, and don’t return phone calls from council staffers. If people complain, just allude to the rigors of business today. But this is a nonstarter for the CEOs I’ve known. Typically, they are direct people who, if they commit to a group, will follow through. It’s the all-or-nothing bias of CEOs that would heighten the dissonance they can feel.
The decision of whether to quit or stay in President Trump’s business councils is a specific example of a fascinating problem in political economy. In his classic book, Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States, Albert O. Hirschman argued that a high rate of exit or “churn” in an organization is a symptom of illness and is typically caused by a toxic culture and the suppression of dissent. Churn is costly, not just economically, but also in physical and spiritual terms. Leading businesses have tried for years to lift retention and reduce churn in customers, employees, suppliers, and investors. We should watch out for more departures from President Trump’s councils as a telltale of (in)stability within the administration—and listen carefully as any more CEOs go: you may hear the echoes of Ben Bernanke’s lament.
A coda: Charlottesville is quiet today, though to all of us here, the protests and violence of last weekend remain alarming. The racism of the KKK, Neo-Nazis, and alt-Right is reprehensible and reminds us that we still have work to do to bind up our society. At the same time, no one I’ve met wants to shrink from the challenge. No one I know is decamping. There is a lot of “voice” today, which one can take as a healthy sign. At a mass meeting of the Darden Community on two days ago, we heard new and returning students, alumni, faculty, and staff members express spirited determination to work toward creating the community and nation of our aspirations. I’m especially inspired by our students who bring energy, optimism, and high purpose to the task. And I’m staying put with the rest of them.
- A quotation from Bernanke’s Memoir, The Courage to Act, and reported in Newsmax October 7, 2015, at http://www.newsmax.com/Finance/StreetTalk/Ben-Bernanke-Republican-Party-GOP-Federal-Reserve/2015/10/07/id/695078/. [↩]