LAS VEGAS — Adidas was in the spotlight in recent weeks as the public and broader business community waited to see how it would respond to antisemitic remarks by Kanye West, a commercial partner of the German sportswear manufacturer.
On Tuesday, nearly three weeks after Adidas announced it was reviewing its partnership with the rapper who now goes by Ye, the company said it was terminating the relationship at a cost of $246 million this year.
The spotlight the controversy placed on Adidas highlights the importance of legal counsel ensuring companies have taken time to define their stances on important social issues, panelists said during a Tuesday session of the Association of Corporate Counsel’s annual meeting.
Advance planning in which in-house legal leaders gather key company stakeholders together to determine potential public positions enables organizations to act expeditiously when a controversy arises, said Laura Mitchell, a principal at Jackson Lewis.
“If you haven't done the work as an organization to understand and set where you are, that's not something that you can answer quickly or easily,” Mitchell said. “So I do think pre-planning and really having in mind who you are and what stance you're going to take will help you address those issues.”
Factors to consider
One factor companies should take into account when crafting their positions on important social issues is where they are located, where their employees reside and where they conduct business, said Yvette Politis, associate general counsel at RELX Group.
“If you're a multi-state employer, that's going to inform your thinking, because different parts of the country have different thoughts on different things,” Politis said. “If you’re a multinational employer, the same thing applies.”
Bryan Perry, vice president and general counsel at Northern Illinois University, said organizations should also examine how stances they may publicly take align with their past actions.
This type of review is particularly important in the information age where consumers can quickly evaluate a company’s history.
“If you have a statement that comes out, but all your other history indicates you don’t stand behind that statement, it is going to be out there,” Perry said. “You really have to pick a stance on who you are because folks are going to know.”
Olesja Cormney, managing counsel at Toyota Motor North America, said current and future employees are also closely watching how companies respond to pressing social issues.
“They're seeing what you're putting out there on social media and other messaging,” she said. “So if you are in the market for talent, this is tremendously important to not just retain current employees but also attract new ones.”
Staying the course
However, Cormney said companies should be cognizant that public positions they take are not going to make everyone happy.
Nonetheless, once a company puts the hard work into determining its stance and makes it public, she said the company should not quickly rescind the statement.
“I think where companies get into hot waters is they change their mind,” Cormney said. “There's pressure to make a statement, and then there's this pushback from their consumers, the bad news and now they're walking back. Make a decision [about] who you are, what you stand for and then communicate it appropriately.”
Politis agreed, calling it a “PR disaster” when companies quickly walk back a statement.
