Should the management of AT&T, the world’s largest telecommunications company, be spending “a lot of time” on political issues? Most people would likely say no: AT&T is a corporation, not a Super PAC. Yet at the company’s latest shareholder meeting, that is exactly what management said it was doing. In response to a summary of shareholder questions over AT&T’s political engagement, CEO John Stankey produced a justification of AT&T’s politicking that inadvertently presented a compelling case for corporate political disengagement.
He began his defense by saying, “This is a hard issue right now, it’s one that I know I personally, and the rest of the management team, are spending a lot of time on.” He stated that “nearly every issue that comes up seems to be viewed through a divisive, partisan point of view,” which is a “tough environment to operate [in.]” He then explained that he “do[es] not believe that companies or CEOs are always best equipped to effectively fill the void that’s oftentimes left by our political leadership.”
In response to concern over AT&T’s participation in political issues that are, in our view, irrelevant to the interests of the company, Mr. Stankey highlighted today’s divisive political environment and noted that his job is to operate in the best interests of the company. Think that through: His defense against the charge that AT&T is meddling in politics emphasized the level of polarization and vitriol in the current political discourse. The same points could be made to argue that the company should stop meddling in politics.
To its credit, management did at least attempt to respond to controversial matters of investor concern on the call. But the executives’ answers betrayed a fundamental misunderstanding about what the role of corporate management is.
AT&T’s shareholder meeting was just one of many that we have attended over the past few weeks, with the intention of asking publicly traded companies about their political conduct. To put things mildly, the response to our questioning of these companies has been less than encouraging. Given that record, we entered AT&T’s annual meeting with decidedly lower expectations.
Some background on why we were particularly focused on AT&T: Like hundreds of other companies, AT&T has publicly endorsed the Equality Act. (For more about why that’s a problem, see here and here.) When we dug a little further, we found a record of progressive activism that was, in its way, impressive in its scope. Of all the companies whose shareholder meetings we have attended, AT&T appears to be the most left-wing — not much of a surprise from the owner of CNN, but still disappointing.
Prior to submitting our question, we looked at their score on 2ndVote.com. 2ndVote compiles data on political corporate activity and assigns companies scores on a 1-to-5 scale, with 1 being the most left-wing. AT&T has an overall score of 1.33.
According to 2ndVote, AT&T has, at one point or another, donated to numerous organizations that directly or indirectly support abortion. They have also been members of several business coalitions that oppose religious-liberty protections, or support laws undermining religious liberty, in Mississippi, Georgia, Pennsylvania, Michigan, Washington, and Tennessee.
AT&T has also been a sponsor of, and contributor to, the Trevor Project, which advocates for the Do No Harm Act — a particularly radical piece of legislation that would explicitly undermine the Religious Freedom Restoration Act.
We thought the company’s activism warranted some scrutiny by shareholders. As at other shareholder meetings, we submitted a question about corporate politicization.
After briefly addressing concerns about CNN, AT&T moved on to the question of their political activity. They did so by summarizing investor questions in a way so vague that it served as little more than an invitation for the CEO to expound on the state of domestic politics: “We’ve gotten a couple questions, with different viewpoints, about AT&T’s engagement on public policy and political issues.” In fairness, where other corporations saw fit to ignore our question on the call and then imply that everything had been answered, AT&T at least acknowledged the controversy, albeit in veiled language.
Mr. Stankey then provided an excellent example of why companies should not be involved in controversial political and social debates that have nothing to do with their business, saying that he thinks “society, and frankly AT&T, functions best when we can collectively find the center on issues. And finding that center is important to AT&T, AT&T’s employees’ long-term interest, the long-term health of this company.”
The legislation AT&T supports, the donations it makes, and the social-media campaigns it runs do not even touch “the center.” The center was the Religious Freedom Restoration Act, a bipartisan piece of legislation introduced in the House and Senate by Democrats, passed with near-unanimous support, and signed into law by President Clinton. That law is specifically overruled by the Equality Act, which received the enthusiastic support of AT&T.
Mr. Stankey’s justifications for AT&T’s political expeditions are contradictory. We are in a particularly contentious political moment, and yet companies still need to publicly advocate for and against various political causes? Why, exactly? What benefits do AT&T shareholders get from all this? Mr. Stankey did an excellent job summarizing why it is particularly perilous for corporations to be involved in politics at the moment. Surely the logical conclusion is then to drop the politics and focus on business? By its management’s own admission, AT&T is spending a lot of time on politics, which they acknowledge is not their day job. Our question is very simple: Why not just get back to your day job?
Mr. Stankey said politics is “as polarized and as caustic an environment as any of us have ever seen.” Absolutely, politics is treacherous territory. Absolutely, CEOs and corporations cannot replace political leaders. Absolutely, shareholders and the public are going to be upset when corporations take positions on contentious issues. That is no excuse for dismissing the concerns of conservative investors. It is, however, an excellent excuse for dropping all the political meddling.
But when shareholders suggested that the appropriate attitude towards the caustic is to step away, the reply is hand-waving non sequiturs, as if to say, “We don’t care what conservatives think.” While it is certain that none of these corporations intend that meaning, that is the attitude being conveyed when questions at the AGM are not taken with the seriousness that they deserve. AT&T fits the pattern, though there was more openness in their meeting than in others.
Nonetheless, the response was a mix of the irrelevant, the dismissive, the condescending, and the paradoxical. Mr. Stankey spoke about “finding the center,” as if AT&T were performing a high-wire PR balancing act — in which the company, curiously, seems to always lean to the left. Our advice is to drop the act entirely. Leave political debates to the rest of the world. Your business ought to be business.