A loose interpretation of how pollsters predict the UK House of Commons will look after the 2024 General Election

04 June 2024

To speak or not to speak: should business leaders take a stance on the UK General Election?  

Mike Robb

Early last week a letter signed by 120 business leaders endorsing the Labour Party made headlines. 

Labour secures backing of 120 business executives, wrote the FT; Business bosses desert Tories and defect to Labour, said the Independent; and 121 business chiefs sign letter backing Labour, read the BBC. 

But when you delve into the list, a good number of the signatories aren’t currently in top executive roles. While the list included names like J.P. Morgan, JD Sports, Heathrow, Aston Martin, and Wikipedia – most of the names of big firms were former leaders, and 90% of the businesses on the list wouldn’t mean a thing to everyday voters. Indeed, Sky News anchor Ian King wrote that ‘letter from business leaders backing Labour lacks star quality’, albeit noting that it shows the party is being taken seriously. 

The cliché goes that business thinks ‘Labour Party bad, Conservative Party good’, and while that moniker has been significantly tested in recent years, there remains no doubt that Labour needs to work harder than the Tories to show the country that it is in fact the party of business and growth. 

But mobilising business to speak on a party’s behalf is an entirely more complex ask in practice and brings us to the crucial question for those still in post: should business leaders take a public stance, and why do most choose not to? 

The argument for keeping quiet 

Staying out of politics remains the sensible default move. Silence, in this case, isn’t indifference but a strategic choice to protect the company’s interests. But why? 

1. A broad church: businesses cater to a wide range of customers with different political views. A public endorsement could turn off some customers, hurting sales and brand loyalty.  

    2. Employee alignment: employees have equally diverse political beliefs. A CEO’s public support for a political party could create divisions, lowering morale and productivity. Just look at the outcry at the usually risk-embracing Paddy Power, who just dropped Boris Johnson from a Euro 2024 ad after internal outcry. 

        3. There will be backlash: social media amplifies any statement, and even a well-meant endorsement can quickly become a nightmare and the business could suffer from guilt by association, or even boycotts. 

          4. Wider stakeholder considerations: political endorsements can strain relationships with investors, partners and suppliers, who may have different political views, and a public stance could complicate these crucial relationships. 

            5. What if you’re wrong? Speaking publicly in support of one party or the other can reap dividends if they’re right, but if the other party wins the chances of a fair hearing in any political engagement evaporates. 

              Of any election in recent memory, this one is the ‘safest’ to take a view – but that simple premise ignores long-term implications. Given the politics of today, anyone predicting where we’ll be in five years is a braver person than I am, and memories are long in politics. 

              The argument for speaking up 

              But is there a time when taking a stand is justified or necessary? 

              1. When there is clear business impact: if a political issue directly impacts the industry or the company’s operations – as both the Brexit referendum and, before it, the Scottish independence referendum certainly did – it is undoubtedly strategically apt for leaders to voice a position. But it is critical to frame the statement around business impact, and not personal or ideological support. It should not be a personal view, but a view that reflects the importance of the outcome on a business as a whole. 

                2. When there is alignment of views: when a business, its leadership, employees, and customer interests are aligned, the strategic rationale for showing public support can be stronger – albeit not without risk. 

                  3. When there’s a middle ground: supporting broader societal issues with political implications can be done without directly endorsing one party or the other. Advocating for growth, stability, environmental sustainability, or fair trade can position a business as socially responsible while avoiding direct political endorsements – even though they may be implicit. 

                    4. When it’s not by accident: public support can be appropriate but only when it’s not done by accident or a ‘lone wolf’ executive going off piste. If it’s a strategically considered move, with clear rationale and considerations of both upsides and downsides, it can be appropriate. 

                      5. When you accept there will be backlash: an intentionally repeated point, but it really is inconceivable that some part of your stakeholder mix doesn’t disagree with you, so this balancing act is key. And when the backlash comes, which it will, you need a thick skin and to not be surprised by it. 

                        The example of Tim Martin, founder of JD Weatherspoon, is one where public support worked. Martin was an active public supporter of Brexit and Vote Leave, and in the three years after the referendum the company’s share price rose more than 90%, with no single drop in performance at any point during his vocal public support. While the public support of Brexit likely wasn’t the cause of this rise, it certainly didn’t harm the company’s performance – in large part thanks to a clear consideration of the company’s customer base and the mood of the nation at the time. 

                        Celebrate the bold or quiver at the thought? 

                        It’s easy for former executives to speak out publicly around an election, but I take my hat off to those currently in post who signed the letter last week. It’s an incredibly difficult step to take, and only time will tell whether or not it’s a move that will reap any benefit. 

                        But, ultimately, would I advise a CEO to come out in public support of the Labour Party right now? In a word, no. There is (very) limited upside, while the downsides are plentiful. Unless they are at the helm of a business with 80%+ of their stakeholders (customers, staff, investors) aligned, or if there is very clear business impact, this is one headache they simply do not need.