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Professor John Holcomb

The current opposition by CEOs to Trump’s vacillation and seemingly conflicting statements on the violence in Charlottesville could mark a major reversal in business support for Trump and lead to a breakup of the Trump coalition.  Though big business has never been part of Trump’s base, it has been a critical component to advance his agenda of increasing economic growth and creating jobs.  Even if the two business councils recently abandoned have not been important on any substantive grounds in generating new policies, they have been symbols of the business community’s support for the Trump agenda.  Much of politics is based on symbolism, and the symbolism of the mass exodus of CEOs from the Strategic and Policy Forum and from the Manufacturing Council conveys a dire message.

The erosion of CEO support for Trump is dramatic but not sudden, though it may have now reached a critical tipping point.  The first wave of CEO opposition to Trump surfaced in late 2016 and early 2017, surrounding the various travel bans.  The early CEO critics originated in the tech sector, never a stalwart supporter of the President, and started with the younger CEOs leading the latest tech startups.  The opposition then spread to the old guard tech companies, where employees pressured more establishment CEOs to take a stand to protect immigrant employees and their families.  Finally, a selective group of CEOs from big business across several industries, and most notably the financial and tech sectors, expressed support for inclusiveness and non-discriminatory employment policies, an either direct or indirect slap at Trump’s proposed travel bans.  The opposition spread from West to East.  Many of the same CEOs and others announced opposition to Trump’s decision to withdraw from the Paris Climate Accord.  Now we have the opposition from an even wider range of CEOs to Trump’s statements on Charlottesville.

There has been much for business to like in the Trump policy agenda.  From regulatory relief to infrastructure spending to tax reform proposals, business could have much to gain from the Trump agenda.  Surely there are areas of disagreement, especially on trade and immigration, but business and CEOs have generally supported Trump policies, and the stock market has responded accordingly.  So why has the chorus of CEO opposition grown?

First, while the country as a whole has grown weary of political correctness and identity politics, no CEO of a modern corporation can fail to appreciate and promote a diverse work force in an increasingly diverse nation, and to show respect for the lives and concerns of diverse populations, both in the U.S. and globally.  Second, modern CEOs must practice consistency in their messages to all stakeholders and not contradict tomorrow what they say today.  Third, while former business CEO Trump has allegedly gained support through his charisma, he is a different type of CEO.  Recent studies show that most CEOs acknowledge the importance of integrity and humility, and many leaders are even introverts.  Their styles and attitudes clash with those of the President.  They are hardly the “grandstanders” that Trump accused the Merck CEO of being, and might even bite their tongues as they voice support for the President or for his policies.

The even greater danger for President Trump, as always under siege by the mainstream media, is that the volatility of his statements may becoming too much for some of his supporters to bear.  The unraveling of CEO and business support might be a precursor to withering support and even outright opposition by establishment Republicans in the House and Senate, already starting to emerge.  If the resignations within the White House and executive branch also grow, as a spillover effect, and ascend to higher levels within the Administration, that could spell further trouble for Trump.  Impeachment talk aside, Trump’s attacks on his critics might lose their effectiveness, and declarations of “we are winning” do not make it so.

This opinion piece was written by John Holcomb, professor of Business Ethics and Legal Studies. He has written many articles and book chapters on the legal, political, and ethical aspects of business. He has a J.D. from Georgetown University, M.A. in Political Science from Vanderbilt University, and B.A. from Augustana College (IL).