US companies have this week faced their first significant test of corporate governance in the Donald Trump era.
When the Trump administration issued its executive order banning the entry of Muslims from seven predominantly Islamic countries, it not only followed up on an election pledge, but attacked the recruitment policies of a number of high-profile US companies.
Google, Facebook, AirBnB, LinkedIn and Netflix were among the many companies that publicly and strenuously aired their objections. Some issued statements, others took direct action by donating money to civil liberties groups or refugee funds.
However, it is perhaps no coincidence that most of these companies were from the tech and digital industry, a sector that recruits programming and technology talent from around the world. Indeed, they believe wholeheartedly that gathering the right people together to work on their services offers a competitive edge. What would their chances be of attracting the right people from any of the seven countries banned if they supported Trump? Silence would surely also send a very poor message to their current employees, a group of people who see themselves, perhaps more than any other group, as citizens of the world.
It is also no coincidence that corporates from other US sectors (except for Nike, which sponsors star Somalia-born athlete Mo Farah who, for a short time, looked like he had been caught by the ban because he was training in Ethiopia) remained largely silent. Either they issued no statements, or the press chose not to report them.
For many companies, those staffed with workers predominantly sympathetic to Trump, the ban presents a much more sensitive issue. Their executives may have liberal hearts, but their workforce may think differently.
And so the ban not only crystallises a split in US society, but also a difference in corporate America: new tech companies on one side, manufacturing and more traditional sectors on the other (if not actively then at least by default via their silence).
The travel ban therefore goes to the heart of the way modern companies try to present themselves: responsible, long-term thinkers concerned for the welfare of their people. That’s the direction of modern governance, a movement many old-school corporate leaders still find challenging. It’s entirely possible that’s Trump’s tenure in the White House will see a spotlight fixed on that split.