Corporations that engage in boycotts can help illuminate or even counteract injustices. They may also threaten democracy.
When people see brands doing something they regard as unethical, the boycott is a strong tactic they can use to push back. But what happens when companies want to respond to unethical behavior by other organizations? Should they boycott, too?
Along with Compass teammates Ryan Jenkins and BJ Strawser, I became interested in this question while watching the #StopHateForProfit campaign unfold. In June 2020, numerous companies pulled their ads from social media platforms, citing failures of the platforms (especially Facebook) to address the proliferation of hateful content and disinformation.
Since #StopHateForProfit, corporate boycotts are trending. Last spring, Georgia’s new voting law drew harsh rebukes from Georgia-based companies like Delta and Coca-Cola and led several entities, including Major League Baseball and the Emancipation film production, to pull business from the state. Last September, 52 companies signed a letter of protest against Texas’s controversial SB 8, which effectively outlawed abortion, while several others, including Lyft, Salesforce, and Apple, took measures to shield employees potentially affected by the bill.
Helping companies define thoughtful and sincere approaches to social activism is a core component of our consulting work. For many challenges, we can draw on existing academic literature about a topic. But the ethics of boycotting is new territory. Ethicists have tended to focus on boycotts by vulnerable individuals and communities, not corporations with towering power and influence. Ryan, BJ, and I have been working on a research project that seeks to fill this gap.
One finding highlights a major concern for corporate-led boycotts: they may pose risks to democratic values. Leading corporations today enjoy annual revenues that dwarf the GDP of many countries. The central role they play in the economy can give them an effective veto over decisions by governments and other groups that offend them. That’s quite different from consumer-driven boycotts, which generally lack the forms of concentrated power that create these risks.
Democracy demands that social decisions result from processes of open and informed discussion, not threats of economic devastation. It also demands that everyone affected by these decisions enjoy equal opportunities for influencing them. Corporations, and those who compose them, should not be able to use their economic clout to drown out the voices of ordinary citizens.
This does not mean that corporate boycotting has no appropriate role in democratic societies. Indeed, our research also finds that in certain circumstances, corporate boycotting can be a matter of duty.
Consider the movement to end apartheid in South Africa. Withdrawal from South Africa by IBM, Ford, Exxon, Barclays, Kodak, and many others in the 1980s and 90s served as a powerful condemnation of racism on the global stage. It may have also hastened the collapse of the apartheid regime.
One prominent study finds that these efforts ultimately had little negative consequences on financial markets, though it does not attempt to estimate the boycott’s political effects. Minimally, however, it appears likely that the actions of corporations increased international pressure on the South African regime and helped to topple it months or years earlier than it would have otherwise fallen.
We think it obvious that participation in the South African boycott was at least morally permissible and likely even obligatory. Combined with further reflection, the example also suggests a few guidelines for the ethics of corporate boycotting today:
Corporate boycotts must only be undertaken for reasons of critical moral importance, such as widespread violation of human rights or pervasive abuse of power.
Corporate boycotts must have a highly plausible causal pathway to the achievement of their goals.
Corporate boycotts should minimize harm to bystanders and innocent parties—and be prepared to provide compensation for any serious harm to such parties.
Corporate boycotts should only be undertaken as a last resort, after more deliberative forms of conflict resolution have been exhausted.
Corporate boycotts should be accompanied by publicly stated, reasonable demands, with clear criteria for resolution.
We think the #StopHateForProfit campaign met most of these criteria and was generally a positive example of a corporate boycott. But it artificially limited its own duration to one month, rather than keeping up the pressure until its demands were met. Nearly two years after the boycott, complaints about hate speech and disinformation on social media remain largely unresolved.
The failure to see things through puts the campaign at odds with our second criterion, which requires that boycotts have reasonable prospects of achieving their goals and are not simply vindictive.
To be consistent with democratic values, corporate boycotting should generally be a tactic of last resort reserved for the most extreme scenarios. However, in a world where these extreme scenarios have become commonplace and democratic processes routinely malfunction, corporations may be increasingly called upon to lead or join boycotts and related movements. What do they do when those calls come? The principles we suggest can help anchor the difficult discussions that many leadership teams are now having—or soon will be.