(Unsplash/Brian McGowan)Early in 2022, Bob Chapek, CEO of The Walt Disney Company—one of Florida’s largest employers with roughly 80,000 employees—and taxpayers, had reason to be satisfied with the company’s performance, having just logged one of the most successful quarters in the company’s history.
Its stock, suffering the typical ups and downs of entertainment companies during the pandemic, had recovered and was at about the same price as when Chapek took over from “legendary” CEO Bob Iger two years earlier. He was aware, however, of a potential problem on the horizon.
On March 8, the Florida legislature, after several weeks of heated public controversy, passed and sent to Governor Ron DeSantis a Parental Rights in Education bill stating:
“Classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade 3 or in a manner that is not age appropriate or developmentally appropriate for students in accordance with state standards.”
Under the bill, parents were given the right to sue school districts over violations.
Chapek had ample warning that the bill would pass. He could have also assumed that the governor would follow through on his intentions to sign it into law. The bill had taken on the moniker “Don’t Say Gay.” There had been “Say Gay” protests across Florida and the US by groups supportive of LGBTQ+ rights. Hundreds of Disney “cast members”—Disney’s term for employees at its theme parks—responsible for spreading “pixie dust” for Disney’s “guests”—were supporters of these groups. Within Disney, employees were protesting on social media and organizing walkouts from company theme parks in Florida and elsewhere.
In spite of these warnings, Chapek elected not to have Disney join more than 150 other companies in signing a Human Rights Campaign letter opposing the legislation. He decided to make no public statements to support or reject the governor’s expected signature of the bill—that is, until Disney’s annual meeting with shareholders on March 9.
At the meeting, Chapek noted that “many are upset that we didn’t speak out against the bill.” He stated that leaders in the company were opposed to the bill, but chose not to speak out, instead working behind the scenes to stop it, “engaging directly with lawmakers on both sides of the aisle.” He then announced that the company “is reassessing our approach to advocacy—including political giving in Florida and beyond.” He also announced that Disney had signed the Human Rights Campaign’s statement opposing such legislative efforts and had pledged $5 million in support of the organization.
The Human Rights Campaign immediately announced that it would not accept the donation until Disney went further to back up its commitments. Pundits, including at least one investment analyst, dubbed the effort, “a day too late.” And DeSantis began repeatedly characterizing Disney in his public speeches as a “woke corporation,” one that will “criticize the fact that we don’t want transgenderism in kindergarten and first-grade classrooms.”
Chapek went further, sending this message to Disney employees: “It is clear that this is not just an issue about a bill in Florida, but instead yet another challenge to basic human rights. You needed me to be a stronger ally in the fight for equal rights, and I let you down. I am sorry.”
Chapek was said to be “furious” with a public statement by his predecessor, Bob Iger. It is not clear what, if anything, transpired between Iger and Chapek regarding the company’s stance on the Florida bill. But Iger, who had stayed on until recently as executive chairman and chairman of the board after a “legendary” tenure as CEO, said publicly, “A crisis of this magnitude, and its impact on Disney, would necessarily result in my actively helping Bob and the company contend with it, particularly since I ran the company for 15 years.”
Among the issues facing Chapek was what to do about a management “retreat” of senior managers scheduled a week hence in Orlando, Florida, to discuss other matters. Would he even be able to get the group to concentrate on the usual business issues? Could he take advantage of the “retreat” to discuss the company’s response to employee concerns? Or should he just cancel the meeting?
Put yourself in the shoes of Susan Arnold, long-time director and recent successor to Bob Iger as chairman of Disney. As Disney board chair, what would you advise CEO Bob Chapek regarding “Don’t Say Gay”? What do you think?
Share your thoughts in the comments below.
Note: Please limit your comments to how you think the Disney board and Chapek should respond, not opinions about the law itself.
Editor’s Note: Heskett speculates on the influence of culture on post-pandemic employee engagement and organization performance in his book Win From Within: Build Organizational Culture for Competitive Advantage.
References:
- Zac Anderson, “DeSantis says he will sign ‘Don’t Say Gay’ bill, slams Disney,” The (Sarasota, Florida) Herald-Tribune.
- Brooks Barnes, “Anti-Gay Bill Spurs Walkout, Rattling Disney,” The New York Times.
- Elizabeth Blair, “After protests, Disney CEO speaks out against Florida’s ‘Don’t Say Gay’ bill,” National Public Radio.
- Joe Hernandez, “Disney workers walk out over the company’s response to so-called ‘Don’t Say Gay’ bill,” National Public Radio.
- Sophie Mellor, “Disney divider: CEO fueds and staff walkouts are rocking the House of Mouse,” Fortune.
- Alex Sherman, “’Extremely awkward’: Bob Chapek and Bob Iger had a falling out, they rarely talk—and the rift looms over Disney’s future,” CNBC.
Your feedback to last month’s column:
Is It Time for More Reverse Mentoring?
There was negligible response to last month’s column. Either there was little interest in the topic of reverse mentoring or potential respondents may have been discouraged from responding by Stac, whose lone response raised a topic, ageism, that others may have chosen not to address.
Stac’s comment is worth repeating. It was: “It’s age discriminatory to assume people of a certain age need mentors under 25. I’ve worked in tech my whole career, and I’ve known people under 25 who knew nothing about tech except how to use Instagram. I’ve also known 60-year-olds who knew all kinds of intricate software tricks that nobody else knew. Please stop adding to age discrimination.”
I appreciate Stac’s reminding us of the sensitive nature of the topic. At the same time, the article did not state a position regarding technology and age. I’ve repeatedly reminded readers and those requesting interviews that I ask questions, I don’t answer them (unless I have personally conducted research on a topic). The example that I included did imply a lack of knowledge of technology among senior executives of one company. We can debate whether the example was well-chosen or whether its inclusion added to age discrimination. But I reserve the right to raise questions about sensitive topics.