By Dennis Shaughnessy
Many of us who study business leadership watched with great interest last month for the corporate response to the tragic mass shooting on Valentine’s Day at The Marjory Stoneman Douglas High School in Parkland, Florida.
Shortly after the tragedy, a not-so-famous business leader spoke loudly and clearly about his company’s response to the senseless loss of 17 people including 14 high school students.
Ed Stack is the CEO of Dick’s Sporting Goods. Dick’s is a large publicly traded sporting goods retailer with more than $8 billion in sales and 700 stores across the country. Several of the company’s stores sell assault-style guns, under the “Field and Stream” brand including assault-style rifles and high capacity magazines.
Mr. Stack announced on February 28 on morning television that his company would no longer sell assault-style rifles (like the ubiquitous AR-15 model) and high capacity magazines, and would raise the minimum age to purchase any gun at his stores from 18 to 21. To many it appeared that Stack was articulating a thoughtful and measured response to a national epidemic of mass shootings. In announcing this policy change, Mr. Stack said: “Thoughts and prayers are simply not enough, we’ve got to do something.”
Walmart, which had already stopped selling assault-style rifles and high capacity magazines after the unimaginable tragedy at Sandy Hook Elementary School in Newtown in which 20 children were killed, followed with an announcement that it too would use a minimum purchase age of 21 going forward.
While Dick’s stock price responded favorably initially, with a nearly 2% gain, it has since declined modestly (DSG’s market capitalization is about $3.75 billion as of mid-March). In part that decline could be the result of Stack’s more recent statement that the new gun policy at the company likely reduced not only revenues from gun sales but also from other product lines as foot traffic at many stores appeared lighter than expected. Despite the declining stock price, Mr. Stack has no plan to change the company’s policies on the sale of guns.
The Dick’s Sporting Goods case leaves us to reflect on the idea of social activism by CEOs. The first widely considered example of this was Salesforce’s CEO Marc Benioff vocally opposing the transgender bathroom policy change in North Carolina, along with other state laws that appeared designed to limit the rights of LGBTQ citizens. We also saw some Silicon Valley CEOs including Mark Zuckerberg of Facebook speak out on the rights (and economic contribution) of immigrants in response to proposed changes to the country’s immigration laws.
We asked students in our CSR (corporate social responsibility) class to ask at least ten friends or family members if they would be more or less likely to shop at a Dick’s Sporting Goods store after learning about the company’s new policy restricting the sale of certain guns. The majority or informal respondents indicated that they would be more rather than less likely to shop at Dick’s. While the response was very much in support of the new gun “restriction” policy at Dick’s, there were also reservations about extrapolating the results beyond our Massachusetts location, given that it is perhaps the least “gun friendly” state.
The Parkland tragedy has changed the way many of us look at the impact of business interests on political decision-making. While we all know that the National Rifle Association (NRA) represents the interests of millions of gun owners, it is less often discussed that the NRA represents first and foremost the businesses that manufacture and sell those guns. For evidence, look at the proposal to arm teachers, which is supported by the NRA. It represents an enormous potential financial windfall for the gun companies.
Where then is the representation of the “other side” of this polarizing social issue of gun rights and restrictions—the rights of citizens and especially students and children to be protected from gun violence. It was encouraging to see a business leader step forward and offer us one small step toward protecting the rights of children to be safe and secure in their schools–especially when that step could be harmful to its sales and stock price.
The courageous students of Parkland are helping all of us to think more clearly about the social impact of businesses like gun manufacturers on the everyday lives of ordinary people. It was encouraging to see some business leaders stand alongside these students. Mr. Stack and Dick’s Sporting Goods felt to some of us like a long overdue moment of moral clarity trumping financial return.
