Employee Activism: A Rising Challenge for Big Brands

As if Big Tech didn’t have enough problems – with major declines in their stock prices over the last few weeks – now comes an unprecedented employee walkout at Google. Yesterday’s walkout was a warning shot across the bows of boardrooms and C-suites, not just for tech but for all major brands.

For years, companies across the technology sector and beyond have trumpeted their “purpose” in their corporate cultures, telling customers and employees alike about their commitment to making the world a better place and having a positive impact. Now, employees are calling on management to align their practices with their principles. Yesterday’s images of the Google employee walkout, broadcast widely across CNBC and elsewhere, were not an anomaly – they were a harbinger of a new phenomenon: employee activism.

In this most recent case, employees are demanding that Google account for secret arrangements that let senior executives accused of inappropriate behavior depart with staggering sums in the form of exit payouts. From a business perspective, it’s not surprising that Google leadership would see such agreements as necessary for protecting the long-term interests of the company and its shareholders. But in today’s world, there’s no longer any such thing as a strictly internal issue, and situations such as these must be handled with significantly greater sensitivity and transparency than they have been in the past.

What does effective transparency look like? Disclosing any severance packages publicly, and explaining to employees the ways in which those arrangements are designed to protect the company and its people.

But moreover, companies like Google must also ensure principled business practices at all levels, and strive for the type of justice that employees (and increasingly shareholders) demand. In addition to being transparent, companies must ensure that codes of conduct are respected, provide mechanisms to report inappropriate behavior, take swift action when problems arise, and always act with integrity.

As we enter this new era of governance standards, the message for corporate boards is clear: Companies will need to address their governance practices honestly and head-on, or face the consequences.