How Consumers Reacted to 2020’s Flood of Corporate “Confessions”
Flipping the PR playbook by admitting wrongdoing can improve a firm’s image and mobilize support for social causes, according to new research.
In 2020, hundreds of companies confessed to mistakes or misdeeds regarding racial equity. | iStock/hapabapa
In the wake of George Floyd’s murder in May 2020 and the surge of activism that followed, hundreds of CEOs issued public statements decrying racial injustice and voicing support for the Black Lives Matter movement. Many pronouncements went so far as to confess ignorance or wrongdoing, even though few of the companies in question were directly targeted by protesters.
This phenomenon went against the typical playbook Sarah Soule had observed in her research on corporate communications. “The standard operating procedure is that companies deny complicity or even throw another company under the bus, and these strategies are really reactive,” says Soule, a professor of organizational behavior at Stanford Graduate School of Business. “These racial justice statements from 2020 were proactive, with leaders saying things that were like, ‘Hi, we’re admitting to all of these bad things we’ve done or our lack of awareness about racial justice.’”
Soule became curious about the effectiveness of these corporate “confessions”: Did they make the public more likely to support Black Lives Matter? And did they improve a company’s reputation for social responsibility?
To find out, Soule and Lambert Li, a PhD student in organizational behavior, tracked down statements on racial equity issued between May and July 2020 by the CEOs of Fortune 500 companies and Certified B Corporations, which commit to standards of social responsibility. According to the researchers’ recent working paper, of the 525 statements they found, 42% confessed to mistakes or misdeeds regarding racial equity. “We were struck when we saw that — it seemed high,” Soule says.
To test the impact of this unprecedented public self-flagellation, Soule and Li recruited a representative sample of more than 1,000 people and had each one read a randomly assigned corporate racial justice statement. They then asked the participants if they wanted to donate some or all of a $1 bonus to Black Lives Matter or write a letter to policymakers in support of the movement. The researchers discovered that reading a statement containing a confession made people more likely to say they supported the statement and also pushed them to donate more money and write longer letters.
The type of confession mattered, too. Some CEOs’ statements conceded a lack of awareness of racism or issues of racial equity — what the researchers called “confessions of omission.” For example, the founders of Yellow Leaf Hammocks, a home furnishings company based in California, admitted to lacking “the lived experience to position ourselves as a corporate voice of wisdom in the Black Lives Matter movement” and promised “to keep listening and learning.” Others admitted to directly contributing to racial inequity within their organizations — known as “confessions of commission.” One example was Coca-Cola’s pronouncement that “Our biggest issue was not that we made mistakes… but that when we knew, we didn’t act to remedy and improve.”
When people read corporate confessions of commission, their average level of support for the statement on a 7-point scale was 5.64, compared to 4.88 for confessions of omission. Similarly, those who read confessions of commission made an average donation of over 83 cents and wrote letters to policymakers with an average length of nearly 63 words; those who read confessions of omission donated around 70 cents and wrote nearly 48 words. People who received statements with no confession professed a support level of 3.85, donated under 33 cents, and wrote less than 36 words on average.
“I was surprised, because it runs so counter to the accepted wisdom,” Soule says. “To the extent that activist CEOs are trying to build broader movements, this is really important in helping them think about how they might frame issues in ways that maximize supportive actions.”
Participants who read confessions were also more likely to give companies a higher rating for coming across as socially responsible. Again, confessions of commission were more effective than confessions of omission. “If your goal is to maintain your reputation as a socially responsible actor, under certain circumstances, releasing negative information about yourself is more effective than controlling the narrative about how good you are,” Soule says.
Waiting for an Apology
To understand why confessions were so powerful, Soule and Li dug into responses to diversity, equity, and inclusion initiatives at a West Coast business school. By reviewing official statements, interviewing students, and observing events, they discovered that people preferred public communications that contained confessions rather than those touting diversity-related achievements because the former seemed more sincere.
“The accepted wisdom is admitting that you’ve got a problem in your policies, practices, or performance is costly to your reputation,” Soule says. “The irony is that under some conditions, doing so is not costlier — it pays off.”
Soule and Li wanted to test whether this effect applied to other social causes. They had around 600 people read statements by a fictitious sports apparel company about sweatshop labor and deforestation. When it came to confessions about using sweatshops, the results mirrored their findings on race: Confessions of commission resulted in higher levels of support for the statements, more money donated to the cause, longer letters to policymakers, and higher ratings of the company’s reputation for social responsibility. With confessions about deforestation, however, the effects were reversed: Firms that admitted they’d contributed to the problem generated less support, fewer donations, shorter letters, and a lower rating for social responsibility.
Soule and Li chalk up the different reactions to people’s expectations of the transgressions a particular company is likely to commit. “When we think about an apparel company confessing to using sweatshop labor, people expect that this is happening,” Soule says. “But when you say something about deforestation, that violates their expectations, so the effects are in the opposite direction.” In the case of racial injustice, the researchers argue that confessions worked because people already expected companies to be complicit: George Floyd’s murder, they write, “likely dramatically influenced public opinion about what organizations should be doing… such that even companies that are known to be relatively proactive on racial issues may be perceived of as not doing enough.”
Soule is now studying whether companies that made commitments involving racial justice in 2020 are living up to those promises. She says future research should examine whether corporate confessions work the same way outside the U.S.
Soule believes that corporate confessions aren’t going away anytime soon, due to the growth of social media, the increasing power of corporations, and logjams in state and federal governments. “This is a direct response to the way in which corporations are increasingly being targeted by activists,” Soule says. “It’s almost like companies are preemptively confessing their misdeeds and foibles before an activist discovers what they have done or failed to do.”
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