Israel-Hamas war puts pressure on companies to speak up

Before Adena Friedman presented Nasdaq Inc.'s financial results on Wednesday's quarterly earnings call, the stock exchange's CEO said the company was "horrified by the acts of terrorist violence" in Israel and denounced the "subsequent loss of innocent lives in Israel, Gaza and the wider region."

She echoed similar statements from chief executive officers at Goldman Sachs Group Inc., BlackRock Inc., United Airlines Holdings Inc. and other companies, who are facing increasing pressure to speak up on a conflict where the human cost is rising by the hour.

Crisis communications experts say their phones have been vibrating out of their pockets as CEOs seek help calibrating their messages both inside and outside their companies. With third-quarter earnings season ramping up, many companies won't have a choice but to face investors, employees and other stakeholders who have come to expect their corporate leaders to weigh in on global events.

CEOs are "all asking the same question," said Davia Temin, founder of New York crisis consultancy Temin and Company. "If you say something, it's about what you say. But equally you are at risk if you say nothing, because silence is a statement, so silence is controversial, as well."

The public messages that are now trickling out on earnings calls mark a shift from the immediate days after the brutal 7 October attack on Israel and the ensuing retaliation against Hamas. Major global companies have so far been generally reluctant to wade into the fray, with only about a fifth of the 100 largest companies in the S&P 500 issuing formal statements about the conflict as of Oct. 17. Nearly all of them, by contrast, released public statements on the Russia-Ukraine war.

That, in turn, has led to criticism from some employees that their corporate leaders haven't spoken up quickly enough.

Take Nike Inc, which hasn't issued a public statement. While the head of the sneaker maker's Europe, Middle East and Africa division sent an email to staff shortly after the attack about the violence's "devastating impact," it wasn't until nearly a week afterward that CEO John Donahoe decried the "horrific attacks in Israel, tragic loss of innocent Israeli and Palestinian lives" in a company-wide message.

Some employees said they were disappointed with the response, according to Slack messages in a group for Jewish employees seen by Bloomberg. One employee quoted the email the person had sent directly to Donahoe, writing the worker's "heart is broken" that the CEO didn't unequivocally condemn Hamas' attack. Another called it a "good first step," but questioned why a company-arranged fundraiser was designated solely for organizations in Gaza and not also in Israel.

Nike said it doesn't "condone violence, hate or bigotry," and that its campaign includes the International Committee of the Red Cross, an organisation that works mostly in Gaza and the West Bank but also in Israel.

In the days after the attack, the head of human resources at Instacart Inc. said she was "deeply saddened to see the extensive devastation and loss of life across the Middle East." Workers at the grocery-delivery company, though, questioned why the senior leadership remained silent and more support from the diversity and equity team wasn't forthcoming, according to internal Slack messages seen by Bloomberg News.

One person called the HR statement "both-sides bullshit" in a chat group accessible to current and former Instacart employees. Another person on the non-corporate-sanctioned anonymous chat said that commenter was "turning a blind eye to the Israeli genocides against the Palestinians."

Instacart CEO Fidji Simo stepped into the fray three days later, mourning the "horrific terrorist attacks on Israel." Hours later, she posted yet another message lamenting "the loss of all innocent lives" — "Israeli, Arab and Muslim alike."

Instacart, which announced a partnership with Israeli tech firm Fabric in 2021, declined to comment.

At German health-care giant Bayer AG, CEO Bill Anderson's LinkedIn post condemning "acts of terror against civilians" was met with a barrage of comments taking umbrage against his statement of "solidarity with the people of Israel," where Bayer has about 150 employees. Workers pushed back against a condemnation of violence that one sales specialist called "one-sided."

Likewise at Procter & Gamble Co., the chief operating officer addressed the issue on an internal message board but the company didn't release a public statement or address the conflict on its Wednesday earnings call.

Some workers said the company's silence was "not only inconsistent with how we've managed other communications to our company, but also a slap in the face to the Jewish employees," according to an email sent to management seen by Bloomberg. The email highlighted P&G's previous messages on Black Lives Matter, Roe v. Wade, the Ukraine war and LGBTQ rights.

In an interview Oct. 17, P&G Chief Financial Officer Andre Schulten said the terrorist attack and ensuing war was a "human tragedy." He declined to comment on the worker emails and said P&G was focused on the safety of its employees and ensuring essential products remain available.

Crisis communications

The Israel-Hamas war comes amid debate over companies' roles in social and diversity initiatives and the expectations of leaders at global companies managing large, diverse workforces.

"Once you get into this game, you cannot get out. That's the expectation now, post-George Floyd," said Paul Argenti, professor of corporate communications at the Tuck School of Business at Dartmouth.

While there was widespread condemnation over the death of George Floyd, companies have begun to scale back public statements on controversial topics to avoid alienating customers and investors. And for good reason — crisis consultants point to the swift outflow of donations in recent days at storied institutions such as Harvard University, highlighting the dangers of wading into geopolitical tensions.

Global operations

Sprawling global businesses with large franchisee operations such as McDonald's Corp or those, like Airbnb Inc, that work with other stakeholders are getting pulled into the fray, whether they like it or not.

After photos and videos surfaced on Instagram that showed franchised McDonald's stores in Israel giving soldiers meals, calls to boycott the fast-food chain spread across social media. Operators in Saudi Arabia, Malaysia and Pakistan renounced the actions. In a statement posted to its Instagram account, the Israeli franchisee confirmed it donated 100,000 meals to soldiers, hospitals and nearby residents.

In a message dated Wednesday and seen by Bloomberg News, McDonald's CEO Chris Kempczinski said the company "firmly condemns violence and hate speech" and is "deeply disturbed by the acts of antisemitism and Islamophobia." The message didn't explicitly mention Israel and Hamas, and didn't directly address the tensions among franchisees in the region. McDonald's declined to comment.

While Airbnb offered to house Ukraine refugees and suspended operations in Russia and Belarus following the invasion, the company hasn't communicated publicly to hosts using its platform in Israel and Gaza, according to 10 who were interviewed by Bloomberg.

"Ignoring the issues and hoping it goes away is the wrong call on Airbnb's part," M. Pursell, a host in Be'er Sheva, Israel, said in an interview.

Airbnb didn't respond to requests for comment. A message on its website said it was "prioritizing the safety of our team, our hosts and our guests" and would allow for penalty-free cancellations.

Daniel Lubetzky, the founder of nut-bar company Kind, said the terror attacks and antisemitism demanded a response and that expectations are higher for companies that have commented on other events in recent years.

"Companies do not need to take a stance on every single event or social issue," he said. But "if you've spoken about other issues and not this issue, it creates in your community a sense of despair."

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.