Referring to a tweet by Mr. Trump criticizing Kenneth C. Frazier, the Merck executive who led this weekâs corporate retreat from the White House councils, Mr. Sonnenfeld said, âNever in history has a president attacked and threatened the chief executive of a major U.S. corporation like that.â
After provoking a furor with his initial failure to condemn the white supremacists behind last weekendâs violence in Charlottesville, Va., Mr. Trump might have staved off a full-scale exodus with his somewhat stilted but conciliatory comments on Monday. But then he reignited the flames at a news conference on Tuesday at which he blamed club-wielding members of the âalt-leftâ for the Charlottesville violence. The white nationalist leader Richard Spencer and the former Ku Klux Klan leader David Duke were quick to embrace his remarks.
As pressure mounted on prominent council members like Jamie Dimon of JPMorgan Chase, Stephen A. Schwarzman of the Blackstone Group, Ginni Rometti of IBM and Indra Nooyi of PepsiCo, as well as other chief executives who remained silent or issued platitudes, corporate boards were hastily meeting to map strategy. âIâve heard from 24 chief executives in the past two days,â Mr. Sonnenfeld said on Wednesday. âBoards are having ad hoc conference calls. People are very worried and concerned.â
Those conversations have been far more complicated than one might expect. Itâs safe to say that no chief executive wants to be identified with white supremacy, racism or domestic terrorism. At the same time the president wields enormous influence over their shareholders, employees and customers.
âChief executives donât have the luxury of ventilating their personal political opinions, whatever they might be,â Mr. Elson said. âThey shouldnât let their personal views influence their business decisions. If they really feel strongly about something, they can always resign and then say whatever they want.â
As he told me shortly after Mr. Trump took office, âWhen the president calls, you should go to see him, regardless of your political persuasion, out of respect for the office.â
Back then, Mr. Sonnenfeld, too, praised Mr. Trumpâs openness to business views as a welcome change from an Obama administration perceived as anti-business. âHeâs very charming and open to new ideas,â Mr. Sonnenfeld said then of Mr. Trump.
This week was a different story. After the Charlottesville events and Mr. Trumpâs comments, âchief executives have a moral duty to use their position as a bully pulpit and to speak out,â Mr. Sonnenfeld said, adding that George Weyerhaeuser, a former chairman of the giant timber and wood products company bearing his name, had once told him, âWe have a license to operate from society, and if we violate that license it can be revoked.â
Or as Mr. Elson told me, âAt some point, if identification with the administration becomes so polarizing that it impairs your ability to run the company, then you may have to do something.â
Weighing the benefits of advising a president steeped in controversy versus the risks to shareholders and other constituents from potential consumer boycotts is a calculus that varies widely from company to company.
At one extreme is a company like Boeing, which, as I noted last week, has thrived by burnishing its ties to Mr. Trump, who posed for photos in front of a 787 Dreamliner at a nonunion Boeing plant in South Carolina. Boeing is one of the federal governmentâs largest contractors ($1.1 billion was allotted recently for 14 Boeing fighter jets); the Export-Import Bank once threatened by Mr. Trump finances many of Boeingâs buyers; a host of other executive-branch decisions affect its profits; and it has no direct exposure to consumers.
At the opposite end of the spectrum is Under Armour, the maker of athletic wear, whose chief executive, Kevin Plank, left the presidentâs council earlier this week. Under Armourâs success depends in part on endorsements from celebrity athletes, many of whom â like Stephen Curry, the basketball star â are African-American. Under Armour customers had already organized a consumer boycott on social media earlier this year, prompting Mr. Plank to issue an open letter pledging to be âa force of unity, growth and optimism for our city and our countryâ and to oppose âany new actions that negatively impact our team, our neighbors or their families.â
That new action appears to have arrived.
âThe risk of consumer blowback is especially acute for companies like Under Armour, and youâve seen this elsewhere in the retail space,â Mr. Sonnenfeld said. But he noted that taking a public stand against a social scourge like racism can also enhance a brand. âTaking a public stand doesnât mean thereâs a misalignment with shareholder interests,â he said. âIt can be the right thing to do. Howard Schultz has done this very effectively at Starbucks.â
On Monday, Mr. Schultz publicly criticized the presidentâs response to the Charlottesville events, and on Wednesday he spoke at an emotional companywide meeting. âI come to you as an American, as a Jew, as a parent, as a grandparent, as an almost 40-year partner of a company I love so dearly,â he said. âI come to you with profound, profound concern about the lack of character, morality, humanity and what this might mean for young children and young generations.â
Historically, corporate aversion to politics has at times held firm even under national leadership that threatens the health of the economy, and with it the well-being of every company. The most notorious example was the support of German industry for Hitler and the Nazi regime, which ended up destroying the nationâs economy. American companies also worked with the Nazis before the United States entered the war, including â as the current Amazon production of F. Scott Fitzgeraldâs âThe Last Tycoonâ reminds us â Hollywood studios.
Comparing the Trump administration to the Nazis may be a stretch, but many business leaders are concerned that stirring up deep-seated racial and nationalist animosities could be destabilizing, leading to riots, property damage and widespread civil unrest reminiscent of the late 1960s. Two Vanderbilt University professors, William J. Collins and Robert A. Margo, documented the devastating economic impact of the 1967 race riots in a widely cited article, âThe Economic Aftermath of the 1960s Riots.â
In such circumstances, collective action by business leaders is often the most effective course, as members of the presidentâs advisory councils appear to have decided this week. That way no one company bears the brunt of the presidentâs wrath.
After Mr. Trumpâs comments about Charlottesville, Mr. Sonnenfeld has been among those calling for collective opposition. âFomenting racial unrest is not in the nationâs interest and itâs not in businessesâ interest,â he said. âDivide and conquer has always been Trumpâs strategy, and somehow it has worked until now. The way to take a bully down is through collective action.â