New Report Addressing Financial and Economic Dangers of Democratic Backsliding

On July 11, the States United Democracy Center and the Brookings Institution published a new report by Princeton Professor Layna Mosley, cautioning that the erosion of democratic practices and norms in the United States poses risks for investors. The report provides a range of tools for institutional investors to mitigate those risks and help protect American democracy. 

The report makes clear that the risks posed by democratic erosion are material, meaning that to fulfill their fiduciary duty, institutional investors must closely consider political risks. To do so, understanding the potential dangers and vulnerabilities that undermine democratic principles is crucial. Economic volatility, increased capital costs, reduced business activities, and threats to the liberal international order are among the risks associated with democratic erosion. 

The report explores democratic backsliding in America, global and U.S. democracy landscapes, and the connection between political risk and economic outcomes, and also offers concrete suggestions to effectively respond to these risks.

Key recommendations for mitigation include:

• Institutions should add U.S. political risk to the set of factors assessed when seeking to safeguard the assets of shareholders and beneficiaries.

• When seeking to acquire existing operations or open new ones, businesses should consider a state’s voting laws and assurances of full access to the ballot, as well as any state-level efforts to interfere with the democratic process.

• Institutional investors should advocate for full disclosure of corporate lobbying expenditures as a means of ensuring that lobbying is consistent with corporate strategy, as well as with respect for democratic political institutions.

• Institutional investors should identify an appropriate subset of U.S. portfolio companies (based on risk profiles, market impact, and responsiveness, among other factors) and focus mitigation strategies — including discussions of U.S. political risk — on them.
  

Leadership Now was glad to provide input to the analysis.

To view the full report, click here.

Additional resources: 

• Review our Democracy State Report Cards, which help business leaders make informed decisions about investing and operating in all 50 states. 

• Our Corporate Civic Engagement Best Practice Guide has case studies and resources for business leaders.

Business & Democracy Initiative Statement on Reintroduction of Freedom To Vote Act

WASHINGTON, D.C.– Today, the Freedom to Vote Act was reintroduced in the United States Congress. As state legislatures across the country work to roll back voting rights, the Freedom to Vote Act seeks to set national standards for voting access and election administration that promote fairness in our democracy and trust in our elections. 

Reacting to the reintroduction of the Freedom to Vote Act, founding partners of the Business & Democracy Initiative, including Leadership Now Project CEO Daniella Ballou-Aares, Public Private Strategies Founder Rhett Buttle, and Black Economic Alliance CEO Samantha Tweedy, released the following statement: 

“Shared economic prosperity is built on the foundation of fair representation for every American. Right now, state legislatures across the country are working to undermine fair representation by rolling back voting rights protections, gerrymandering districts, and even working to give themselves the power to overturn free and fair election results.  “Business leaders – from Fortune 500 companies to Main Street – have been front and center in the work to protect voting rights and promote democratic fairness. Research from the Business & Democracy Initiative shows that over 80% of business leaders recognize the role businesses should play to support a safe and fair electoral process. 

“We applaud measures in the Freedom to Vote Act that protect voters of color by setting national standards for voting access and cracking down on unfair districts that severely undercut the political power of millions. And we know that business leaders across the country – representing the most trusted institution in American life according to recent Gallup polling – will continue to advocate for measures like those in the Freedom to Vote Act that strengthen our democracy.”

# # #

About the Business & Democracy Initiative

We are a partnership of business organizations dedicated to protecting our elections and rebuilding trust in democratic institutions because we know that a strong democracy is the cornerstone of a dynamic and inclusive American economy. The Business & Democracy Initiative’s founding partners are top business leaders and advocates: the Black Economic Alliance, the Leadership Now Project, and Public Private Strategies. We engage stakeholders across all levels of business to advocate for reforms that strengthen our democracy. As the health and stability of American democracy continue to be under serious threat, the business community is a critical voice in the fight to preserve our free, open, and democratic system. Learn more about the Initiative at businessanddemocracy.org.

A Victory for Democracy in the Supreme Court

June 27 marked a significant victory for democracy as the Supreme Court, in a 6-3 ruling, decisively rejected an indefensible interpretation of the Constitution's Elections Clause — known as the independent state legislature theory. This theory proposes that state legislatures can regulate elections unrestricted by state constitutional provisions, state courts, or even potentially, a governor's veto.

Leadership Now was proud to submit an amicus brief to the Supreme Court in Moore v. Harper with the support of pro bono counsel from Covington and Burling LLP. Our brief distinctively argued that independent state legislatures could pose substantial threats to businesses and markets through gerrymandering and election interference.

With this victory and the successful reforms to the Electoral Count Act last year, we’ve been a part of bringing about real and significant changes to diminish election risks in 2024.

Leadership Now remains committed to advocating for certainty and stability in our elections and upholding the rule of law. We will persist in presenting the business case for these crucial democratic principles.

How CEOs Can Navigate Today's Politically Fraught Environment

JUST Capital, the platform for measuring corporate performance in the stakeholder economy, featured Business & Democracy Initiative founding partners Daniella Ballou-Aares, CEO & Co-Founder of the Leadership Now Project, and Rhett Buttle, Founder & Principal of Public Private Strategies, discussing why businesses have a vested interest in a stable democracy and why leadership matters.  

JUST Capital: 2 Key Ways CEOs Can Navigate Today’s Politically Fraught Environment

In this piece, Buttle and Ballou-Aares explained the important role CEOs play in making change and why business leaders should continue to take meaningful action on issues that are important to them.

1) CEOs can’t forget the role they play in today’s society. As trust in the government, media, and other institutions remains low worldwide, business leaders have emerged as relatively more trusted to be transparent and put the interests of their stakeholders first.

“People don’t feel that the government is responsive to their interests and needs and are looking for leadership elsewhere,” Buttle and Ballou-Aares said. “That’s part of why CEOs are in the hot seat.”  

2) Executives must get more comfortable speaking out. Media bias, cancel culture, and the challenge of navigating different stakeholders can make speaking out a difficult decision for CEOs. But Buttle and Ballou-Aares underscored that the American public wants to hear from its business leaders. 

“Business leaders should be confident that their voices matter and that the people they interact with – from employees to customers to communities – want to hear from them on critical issues,” they wrote. 

“Freedom of speech is fundamental to our democracy and our economic stability. Rather than standing down in the face of retaliation, companies have a vested interest in working together to uphold our democratic values.”

Learn more about the Business and Democracy Initiative and explore additional steps the Leadership Now Project recommends business leaders take to protect democracy.

Disney CEO Defends Corporate Freedom of Speech

As major national corporations increasingly come under political attack by state governments looking to prosecute culture war fights, a prominent CEO is pushing back.

“A company has a right to freedom of speech just like individuals do,” Disney CEO Bob Iger told shareholders earlier this month. Iger used his freedom of speech to call out Florida Gov. Ron De Santis for his retaliatory moves against the entertainment giant, calling him “anti-business and anti-Florida.” 

Disney is the state’s largest corporate employer and taxpayer and has been subjected to a series of escalating moves by the state government in response to Disney taking a public position on policy. Disney, which has been operating in Florida for 50 years, spoke out against a law that would restrict speech in schools on LGBTQ topics, the so-called “Don’t Say Gay” law. The state of Florida in turn sought to restrict some of Disney’s power to control the land around and on which Disneyland sits.

Told of Iger’s comments, a spokesperson for the Florida governor promised to continue the state’s fight with the company, warning, “As Governor DeSantis recently said, ‘You ain’t seen nothing yet.’”

Iger’s actions are just the latest example of companies redefining what stakeholder capitalism looks like by taking bold steps to support issues that matter to workers, customers, the community, and others critical to long-term success. Tech giant Salesforce, for example, has sought to change the narrative around stakeholder capitalism by speaking out on voting rights issues. In this 2019 New York Times opinion piece, CEO Marc Benioff described why businesses and executives must value purpose alongside profit.

Daniella Ballou-Aares, CEO of the Leadership Now Project, spoke to The Hill about how CEOs are starting to respond proactively to political retribution. As the last few years have shown, businesses that remain silent in the face of attacks on free speech, ESG, and democracy only invite further abuses of power.

To learn more about stakeholder capitalism

and how other businesses are confronting their role in democracy, you can read Leadership Now’s Business Leader’s Guide to Democracy.

Leadership Now Members Support Democracy In Wisconsin Supreme Court Race

On April 4, Wisconsin voters cast ballots for democracy, electing Judge Janet Protasiewicz by a double-digit margin to the state’s Supreme Court in a special election that had drawn national attention as one whose outcome could “change the course of the entire country.” 

Writing in her March Democracy & Business Update on LinkedIn, Leadership Now CEO Daniella Ballou-Aares noted how the court, under its previous 4-3 majority, barred drop boxes for vote-by-mail ballots and refused to act on unfair district maps in this notoriously gerrymandered state. Wisconsin’s maps merit an F from the Princeton Gerrymandering Project and the state as a whole receives a C on Leadership Now’s Democracy Report Card, she reported. 

The importance of the April 4th election prompted Leadership Now’s Wisconsin members to take action — sending a questionnaire to the candidates asking them to confirm their commitment to democracy. Judge Protasiewicz responded and agreed to uphold future election results; her competitor Dan Kelly declined to respond to the group’s 5-question judicial letter. 

Anoop Prakash, John Floreshim, and Sachin Shivaram, Leadership Now members and leaders of Wisconsin Business Leaders for Democracy, made a case in an op-ed in the Milwaukee Journal-Sentinel on the importance of the special election. They wrote:

"The stakes could not be higher. As a non-partisan group of business leaders from both political parties, we believe it is in the best interests of all Wisconsinites to elect justices who will uphold our freedoms and support the principles of democracy on which our country was founded."

The group also aired an ad explaining its rationale for endorsing Judge Protasiewicz.

The court, with Protasiewicz now on it, is expected to hear many crucial cases in the years ahead — on gerrymandering, abortion, and challenges to future presidential election results. 

Subscribe to the Monthly Business +  Democracy Update on LinkedIn.

Leadership Now Project is a section 501(c)(4) social welfare organization with a mission to protect and renew American democracy. Project Democracy is a separate, affiliated political organization that supports candidates who share that mission.

The Challenge of Building Trust

“What will it take to rebuild trust?” asked Leadership Now CEO Daniella Ballou-Aares in the latest Democracy & Business Update on LinkedIn. “It starts with courageous individuals like Leadership Now honoree Al Schmidt, Pennsylvania's Secretary of State, who [in January] was awarded one of America’s top civilian honors for his defense of the 2020 vote while overseeing the Philadelphia election as a Republican City Commissioner. Even while he and his family endured threats to their safety, he stood up to Trump’s pressure to overturn the election results.” 

“But people like Al Schmidt alone won’t be enough to defend and rebuild democracy for the long term,” Daniella wrote in the Leadership Now update. As NYU professor and democracy expert Richard Pildes discussed at Leadership Now’s 2022 annual meeting, polarized, ineffective government fosters an atmosphere where autocratically-inclined leaders who promise to ‘deliver’ and create order through strength can gain popular appeal and undercut democracy. We've seen this play out in countries from Hungary to Brazil to Italy to India in recent years.

“With the Edelman Trust Baromoter once again showing that business is the most trusted sector in society, the burden for all of us to use that trust wisely is high. How can you help rebuild trust in our system, even as some political leaders burn it?”

Read on in the Monthly Business + Democracy Update

for Daniella Ballou-Aares’ tally of the low and high points for trusted leadership that have defined the start to 2023 — and the latest perspectives of Leadership Now and its members in the press.

Subscribe to the Monthly Business +  Democracy Update on LinkedIn.

Classified Documents Risk Further Eroding Trust In Democracy

How is it possible that the current president, the former president and the former vice president all be tripped up by the same federal document control system, ostensibly designed to keep America’s most vital secrets safe? And what does that have to do with the strength of American democracy?

Leadership Now Project CEO Daniella Ballou-Aares took on this question in a recent appearance on MSNBC, joining American Voices with Alicia Menendez to share her perspective on the burgeoning controversies over improper possession of classified documents by some of America’s most prominent and powerful public officials.

“One of the really worrying things about this whole scandal is that [it] further erodes American trust and democracy,” she told viewers. “We need to look at the system and make something that actually works.” She emphasized the need to modernize the system and also ensure we “find the real instances of threats to national security and intent to undermine it,” rather than simply that documents marked classified were retained after officials left office.

While the complications associated with classification are a serious challenge to public trust, they may also present an opportunity for reform —and for taking a robust look at how the U.S. government strategically uses information and keeps it secure. In 2010, President Obama passed The Reducing Over-Classification Act in response to findings by the 9/11 Commission that overclassification had undermined national security. In 2023, we again find the system – replete with overclassification and confounded by a lack of clarity around what should be classified – posing a risk to national security by undermining Americans’ faith in the system and creating a weakness our adversaries will see as an opportunity.

The State of Trust Among Business & Government

The much-anticipated 2023 Edelman Trust Barometer was recently released and, once again, the results show a tremendous opportunity for business leaders.

The Barometer

For the past 23 years, Edelman has used the survey to study people’s trust — “the ultimate currency” — of institutions, including business, governments, NGOs and media. The goal of the report is to help organizations understand and navigate trust among stakeholders. The online survey sampled more than 32,000 people across 28 countries.

The Findings

Business continues to be the only trusted institution, and that trust is significantly higher than trust in government.

• Global trust: business - 62%; government - 51%;

• US trust: business - 55%; government - 42%

• US trust in business is six points higher than in 2022.

Business is seen as both more competent and more ethical than government.

• Competence: 54 points higher

• Ethical: 30 points higher

Polarization has increased at home and abroad.

• 53% of respondents globally and 67% of Americans say their country is more divided today than in the past.

• The US is one of six countries (including Argentina, South Africa, Colombia, Spain and Sweden) considered “severely polarized”.

• 41% of people said that government and business working together in partnership is most likely to result in being able to work through ideological divisions that exist.

The majority of people — on both sides of the aisle — want more engagement from business on societal issues.

• The majority of respondents expect CEOs to take a public stance on treatment employees, climate change, discrimination, the wealth gap and immigration.

• Nearly half of respondents think business should take steps to address climate change, economic inequality, energy shortages, and health care access, while only 8% thought business taking such action would be overstepping.

“...People are looking to business leaders maybe because businesses are taking action in a way that government can’t or won’t...They’re not just saying, but they’re also doing.”

— Eleanor Hawkins, Axios

The Bottom Line

As trust in government continues to erode, business has a unique opportunity to leverage its position of power and influence to both deliver results and make a positive impact on society.

Sources:

• 2023 Edelman Trust Barometer

• Axios: Trusting business over politics in shaky times

• Fortune: Can business executives help heal societal divides?

• Edelman Trust Barometer Says We Only Trust Business—And Democrats Trust It More Than GOP

Leadership Now Honoree Named PA Secretary of State & Honored by President Biden

Defenders of democracy are often unsung heroes, but every so often their deeds are so significant that they cannot go unrecognized. We were delighted to see one such hero recently receive national recognition for his commitment to protecting our democracy. This week, Former Philadelphia City Election Commissioner Al Schmidt was named Secretary of State by Pennsylvania governor-elect Josh Shapiro and honored with a Presidential Citizens Medal by President Biden.

2022 Leadership Now Award presented to Al Schmidt in May 2022

At our 2022 Annual Member Meeting in May, we presented the Leadership Now Award to Al for his commitment to election integrity which never wavered in the face of intense pressure, misinformation and threats. As a fierce defender of the electoral process, we are delighted to see him selected to champion democracy in a statewide role and recognized with the nation's second-highest civilian honor. 

Congratulations and thank you for your dedication to our democracy, Al!

January 6th, ECA Reform and a Hopeful Start to 2023

On the second anniversary of January 6th, our CEO, Daniella Ballou-Aares, shared her thoughts on the state of our democracy and the year ahead. Read her article below and subscribe to our LinkedIn newsletter here.

“Today, on the second anniversary of the January 6th insurrection, I want to share a few brief reflections on what this moment tells us about the state of American democracy. 

In short: As we start 2023, I am hopeful about the direction of America’s politics. The most hopeful I’ve been since 2016. The midterm elections proved that election denial is a losing proposition (as deniers lost high-profile races to pro-democracy candidates), critical referendums strengthened voting protections, election and campaign finance reforms continued to win over voters, and independent voters broke for the middle and political normalcy. 

And on December 23rd, Congress took another critical step — passing reforms to the Electoral Count Act. This puts in place key provisions to prevent another insurrection. It clarifies that the vice president’s role in counting electoral votes is purely ceremonial, raises the objection threshold from just one member in each chamber to 20 percent of Congress, and requires that Congress accept the lawful slates of electors for each state. Read more here.

The Leadership Now Project is proud to have joined the year-long effort to enact the legislation. In that time, Leadership Now members made the business case for protecting elections, engaged with numerous senators, made our support known in the press and in many on- and off-the-record convenings, and encouraged other business associations to sign on.

As we look to the year ahead, I am hopeful we can take steps to reinvigorate our system while remaining vigilant in responding to potential threats. January 6th reminds us that the risk of political violence persists. And my own memories of that day, when I lived only six blocks from the Capitol, are still surreal. Keeping my daughters playing in the basement while outside sirens blared. How, in the weeks that followed, a green zone was established that ended at my corner. Military vehicles patrolling the streets. They were the sort of scenes I’d observed working in emerging economies, not ones I had ever imagined seeing in my own country. 

Preventing another Jan 6th, and making our system more dynamic for the future, is why the Leadership Now Project exists. We hope you will join us in the year ahead in being hopeful, vigilant, and committed to building a stronger American democracy.”

Leadership Now 2022 Recap

When it comes to democracy, 2022 was full of many trials and tribulations, in addition to some pleasant surprises. While we watched the aftermath of the January 6th insurrection and saw continued attacks on inclusivity in the name of free speech, we also saw heroic attempts by people to defend the principles of democracy and witnessed an historic rebuke of election denialism in the midterms. Throughout the year, Leadership Now and its members worked together to inform, engage and mobilize business leaders to ensure the United States has a strong democracy and economy. See below for a brief recap of our 2022 highlights:

Leadership 

• Recruited new members from reputable businesses, universities, and civic institutions  

• Increased position as a leading nonpartisan, trusted voice on how the business community can protect US democracy  

• Hosted and participated in a variety of thought-provoking events from the Master of Scale Summit to Fast Company’s Innovation Festival

• Launched a LinkedIn newsletter, which obtained 800 followers after the first issue 

• More than 70 stories placed in major media outlets highlighting LNP and its members, including The New York Times, Financial Times, and Fast Company

Coverage of LNP and its members in more than 70 major media outlets

Actions & Results

• After engaging with numerous senators, making our support known in the press and in many on- and off-the-record convenings, encouraging other business associations to sign on, and working in collaboration with organizations to advance the legislation, Electoral Count Reform Act was passed as part of the ombinus spending package in December.

• Mobilized influential business groups in support of Michigan’s Promote the Vote ballot initiative, which was passed in November 

• Joined more than 60 groups and individuals submitting amicus briefs in Moore vs. Harper, which could give state legislatures unprecedented control over elections. 

• Launched the Project Democracy PAC, which supports candidates and elected officials who advance an effective democracy for all Americans . Majority of PAC-endorsed candidates won their midterm elections, including Wisconsin Governor Tony Evers

Project Democracy PAC TV ad supporting Tony Evers in Wisconsin gubernatorial race

• Hosted 30+ briefings with renowned academics and authors; elected officials and candidates; and partners like Voting Rights Lab, Protect Democracy and WorkMoney. 

• Developed innovative, informative tools including the Business Leader’s Guide to Democracy, Democracy Report Card and Corporate Civic Engagement Toolkit 

• Released impactful research on Business Risk in Flawed Democracy, ESG and Political Influence, the Role of Independent Women, and more.  

• Members, which belong to various political parties, collaborated and developed meaningful plans at our largest-ever annual meeting 

• Funded survey led by Tufts University Associate Professor of Political Science, Dr. Eitan Hersh, examining business leaders’ attitudes toward political engagement 

• Became a founding member of the Business and Democracy Initiative, a partnership that mobilizes corporate leaders committed to protecting elections and rebuilding trust in democratic institutions 

Thank you to all of our members, partners, and funders for your support and collaboration in 2022. We look forward to continuing to work together to protect and improve our democracy in 2023 and beyond.

Leadership Now Project is a section 501(c)(4) social welfare organization with a mission to protect and renew American democracy. Project Democracy is a separate, affiliated political organization that supports candidates who share that mission.

Leadership Now Applauds Passage of Reforms to the Electoral Count Act

Earlier today, Congress passed bipartisan legislation to reform the Electoral Count Act (ECA) of 1887 as part of the omnibus spending package. 

Reforming the ECA is an essential step toward preventing another January 6th. It clarifies that the vice president’s role in counting electoral votes is purely ceremonial, raises the objection threshold from just one member in each chamber to 20 percent of Congress, and requires that Congress accept the lawful slates of electors for each state. Read more here.

While ECA reform is only one among multiple essential federal and state actions necessary to protect our elections and democracy from interference, the passage of this bill that attracted support from both sides of the aisle is worthy of celebration.

Leadership Now Project is proud to have joined the year-long effort to support legislation reforming the ECA. In that time, Leadership Now members engaged with numerous senators, made our support known in the press and in many on- and off-the-record convenings, and encouraged other business associations to sign on.

Passage of the ECA is a fitting end to an important year for American democracy – a meaningful step forward while also a reminder of how much remains to be done.

Podcast: How Can Business Help Solve America's Democracy Crisis?

Leadership Now CEO and co-founder Daniella Ballou-Aares recently joined the Politics in Question podcast for an intriguing conversation with Lee Drutman and James Wallner on the state of US democracy and how businesses can and should be involved.

Highlights:

• The role of business in politics and in society is one that Americans have mixed feelings about. Recent data (e.g., Edelman Trust Barometer) show business is the most trusted institutions in society, but Americans also have mistrust of how business plays in politics, uses its influence, etc.

• The question now is, how can business play a positive role at this moment when democracy is facing such a critical moment?

• Generally, business views politics through a government affairs lens, used to minimize task and regulatory risk.

• There is a concern among the business community about political retribution for taking stands on social and policy issues that don’t align with their elected representatives,

• Two elements to businesses successfully taking a stand on democracy:

  • Pre-defining what the factors are where businesses are willing to step out on an issue because political leaders are crossing well-defined lines of what is appropriate in a democracy. These triggers could be: refusal to accept legitimate election results; responding to political violence; political retribution for free speech, etc.

  • Stepping out in a coalition, which is usually done at the state level, but in some cases can be done nationally (for example, the business coalition re: legitimacy of the 2020 election).

• Businesspeople and companies can play a meaningful role in protecting the democratic system and responding to systemic risk, as well as innovation in the system.

Click here for the full podcast.

New Research: How Are Business Leaders Engaging in Politics?

Tufts University Associate Professor of Political Science and Leadership Now member Dr. Eitan Hersh recently released findings from a new survey funded by Leadership Now that examines the changing partisan landscape of the business community and business leaders’ attitudes toward political engagement. On a call with our members, Dr. Hersh dove into the results and shared his thoughts. Here are some of the key findings:

Shifting Political Alignment

No matter their political preference, the majority of survey respondents believe US businesses have become more aligned with Democrats in the last decade. Executives say CEOs and employees have the most influence over corporate political alignment compared to other stakeholders such as customers or investors, and they believe CEOs and employees are causing the political realignment.

Policy Focus Areas

There is a widespread appetite among business leaders for companies to do more on most policy issues. The one exception is election administration policy — no matter their political affiliation, business leaders overwhelmingly disfavor companies becoming more involved in elections. Of the variety of social/policy issues companies can get engaged with, economic policy is the most popular. More engagement in environmental and social policy engagement was also of interest to business leaders, regardless of their political affiliation. There was near unanimous support from all respondents for companies encouraging people to vote as a strategy for civic engagement.

Corporate Political Activities

Most business leaders prefer political engagement in the form of “traditional elite methods”, such as advocacy through industry groups and executives meeting directly with lawmakers. Executives strongly disfavored turning away objectionable customers that disagreed with their own values; however younger executives in customer facing organizations/roles were much more likely to support dropping objectionable customers. About one-third of executives said that their companies regularly make political contributions and most executives believe that their companies should scale down their political contributions. Additionally, overall executives have concerns that increased company political activism would harm profitability, employee morale, and brand favorability; however, Democratic business leaders have a stronger preference for corporate activism than Republican business leaders.

In addition to the survey, Dr. Hersh conducted 30 hour-long one-to-one interviews with executives and was able to get a sense of the constraints the business leaders face, as well as the lack of awareness of what it would mean to be involved in lawmaking and policy efforts.

Dr. Hersh recently published an op-ed in The Atlantic with his thoughts on “political hobbyism — a performative form of civic engagement that has become the white-collar set’s preferred approach to public affairs.” He uses the example of companies that publicly stated they would not contribute to politicians who voted against certifying the 2020 election and then quietly went back to donating to them. He encourages business leaders to strategically get involved in long-term civic engagement, rather than take public stands but not hold themselves accountable.

Dr. Hersh plans to expand his research to include input from the general public and expects results in January 2023. We will be sure to share those findings once they are released.

Post-Election Analysis: Is Democracy at an Inflection Point?

Insights from the Midterms

Two weeks after Election Day, one result is crystal clear: the elections were a resounding win for American democracy. Election denialism was on the ballot, and in state after state, it lost.

Do the election results indicate we are at an inflection point? The events of the last few weeks – the midterm rejection of election denial, the repudiation of Trump jumping back in the ring, Musk’s self-inflicted Twitter wounds, and the implosion of Sam Bankman-Fried’s crypto empire – suggest that a particularly toxic brand of hubris that has become a central feature of our politics may have reached its limits.

While there are certainly risks ahead, I believe we have a unique opportunity to change the trajectory of our democracy. First up? Keep the pressure on Congress to pass the Electoral Count Act in the lame duck session (December). And then watch closely the Supreme Court case on the "independent state legislature theory”; our amicus brief argues that an unchecked state legislature is a risk to the economy and the rule of law. Oral arguments commence December 7th.

There is much more to do in order to protect, innovate and rebuild our democracy. It’s up to us to seize this moment. 

Five Key Election Takeaways for Democracy

• Pro-democracy candidates beat election deniers in key governor races in Arizona (Hobbs), Pennsylvania (Shapiro), Michigan (Whitmer), and Wisconsin (Evers). Governors and Secretaries of State oversee state election machinery and legislative decision-making on elections. The prospect that an election denier could hold such a position was frightening. But, in every swing state where they ran for Governor or Secretary of State, they lost. Republicans who didn’t embrace election denial, like Raffensperger in Georgia, fared far better.

• Michigan voters make their voices heard, prioritizing democracy. A ballot initiative strengthening access to voting and protecting against election interference in the state’s constituencies was resoundingly approved. Exceptional leaders beat election deniers to retain the top three statewide positions. Implementation of objective redistricting – secured in a citizen-led ballot initiative in 2018 – led to more competitive state legislature races. Democrats won majorities in the state House and state Senate for the first time in 40 years and as in other states, Michigan voters used the ballot to prevent restrictive abortion laws that lacked popular support.

• New York turns competitive: New York’s rushed redistricting led to multiple new competitive House seats, 4 of which Democrats lost. The complacency of NY Democrats, a top of the ticket that failed to generate enthusiasm among voters (Hochul’s margin lagged Biden’s by 17 pts), and a sense of frustration with crime and other local issues appeared to be at play. New York stood in contrast to Ohio, where the courts found newly drawn maps unlawfully gerrymandered but refused to mandate new maps (which the NY courts did). The result is that unlike NY, Ohio’s distribution of Congressional seats remains disconnected from the actual partisan breakdown of voters in the state.

• Election and campaign finance reforms continue to win over voters: Nevada voters approved final five primaries with ranked choice voting, Connecticut voters backed early voting, and a divided Arizona electorate overwhelmingly approved a measure curbing undisclosed spending in political races. At the municipal level, several cities approved ranked choice voting systems, including Seattle, WA; Portland, OR; and Portland, ME.

• Talented new Gen X candidates prevail: Newcomers to Governor’s mansions include dynamic, pragmatic Gen Xers from Wes Moore in Maryland to Josh Shapiro in Pennsylvania and Maura Healey in Massachusetts – who each won by double digits. Similarly, compelling candidates retained their seats in tough House races, Angie Craig (MN), Abigail Spanberger (VA), Katie Porter (CA), and Elissa Slotkin (MI) among them.

Leadership Now Members Take A Bold Stand for Democracy

In the 2022 midterms, the business leaders in Leadership Now’s membership took action. Here are four ways our organization and members contributed:

• Making the business case that democracy was at stake in 2022: Leadership Now focused on making the case that democracy was a central issue in the midterm elections. Our unique analyses helped explain the risks and dynamics in 2022 for members and wider business audiences, including in major media outlets. Our Election Risks analysis and ESG & Democracy memo were shared widely with C-suite executives, Boards and investors. We polled independent women in swing states and launched a state Democracy Report Card to inform state level priorities. Weekly member briefings, the annual member meeting in NY, and numerous member-hosted events convened leading thinkers and political leaders and drew attention to the critical issues at stake this cycle.

• Standing up against an election denier in Wisconsin: In an ad viewed 4M+ times, and produced by the Leadership Now-affiliated Project Democracy PAC, business leaders and Leadership Now members endorsed Gov. Evers as the only candidate committed to certifying elections regardless of the result. Evers won by ~90K votes against Michels.

• Ensuring democracy is protected in the Michigan constitution: Leadership Now endorsed the successful Promote the Vote Ballot Initiative (which won on a 60% to 40% margin) and helped secure critical business endorsements, including from the Detroit Regional Chamber. The initiative protects access to voting and reduces the politicization of elections.

• Supporting highly qualified candidates that mobilized the middle: Unlike most midterm elections, the majority of independent voters broke for the party in the White House. Leadership Now supported highly-qualified candidates for Congress and Governor who successfully inspired voters in the middle including our 2022 Candidates to Watch list. WelcomePAC, a Leadership Now partner, invested in races where compelling moderates ran but were overlooked by the Democratic Party and considered unwinnable. Two such races, CO-3 and CA-41, where election deniers Lauren Boebert and Ken Calvert lost by exceedingly small margins. These races reinforce the case for overhauling candidate funding models.

How to Boost Your Brand Through Civic Engagement

With voter turnout in the 2022 midterm elections at the second highest level in more than 40 years, many businesses are seizing the opportunity to engage stakeholders and tie their brand to civic engagement.

A recent Inc. Magazine article lays out four ways companies can promote their brand during an election season:

1. Provide accurate and accessible voter information.

2. Make it easier for employees to vote by giving them paid time off.

3. Focus on one issue important to the company and its stakeholders.

4. Help voters get to the polls.

Our work was highlighted in the piece: ”One of the most commonly reported barriers of getting to the polls is getting time off from work, according to a report from Leadership Now Project, an organization formed by a group of Harvard Business School graduates who seek to improve governance.”

Read the full article: https://www.inc.com/xintian-tina-wang/midterm-election-2022-campaigns-brands.html

How Did 2022 Ballot Measures Affect Democracy?

The 2022 midterm elections included voting and election ballot initiatives in several states across the country. While some measures made it easier for people to vote and introduced new electoral systems, others tightened voting laws. Many of these initiatives will directly impact each state’s overall grade on our Democracy Report Card.

Pro-democracy initiatives were on the ballot in three states:

• Michigan's Proposal 2 passed, providing free postage for absentee ballots, implementing nine days of early voting, and requiring ballot drop boxes for every 15,000 voters in a municipality. Leadership Now, local business leaders, and the Detroit Regional Chamber supported this “Promote the Vote” ballot initiative. As a result of these robust changes, Michigan may be able to take a leading overall grade in democracy, currently ranked fifth nationwide.

• In Connecticut, Question 1 passed, which will allow the state legislature to provide for early voting. Early voting will improve Connecticut's grade. 

• Nevada has cleared its first hurdle toward changing the status quo - despite opposition from both political parties. Question 3 passed, introducing open primaries and ranked choice voting (RCV). Like Alaska's new system, Nevada's traditional partisan primaries could be replaced with a ballot of all primary candidates where the top five will advance to a ranked-choice general election. The introduction of RCV has several positive effects on a state's democracy and could help raise Nevada’s current D grade in voting and B grade in electoral systems. The new voting system may increase competition between candidates, encourage cross-partisan efforts, reduce extreme messaging, and reveal the candidate with the most support across the entire electorate, not just the most passionate voters. To amend the Nevada Constitution, voters must approve Question 3 a second time in 2024.

Stricter voter-ID laws were on the ballot in two states. Arizona’s Proposition 309 is likely to fail, while Nebraska’s Initiative 432 passed. Nebraska will now require a photo ID to vote. Nebraska was previously the only Republican state without a voter-ID law. By adding a barrier to voting, Nebraska's average grade will decrease. Notably, a divided Arizona electorate overwhelmingly approved a measure curbing undisclosed spending in political races. 

Ohio passed Issue 2, which will limit voting for noncitizens. According to the measure, only US citizens registered to vote for at least 30 days are eligible to vote in state or local elections. Ohio has a C rating across the board, and this change may have a marginal impact on its grade. 

Additionally, state lawmakers in Arkansas tried to deceive voters into making the ballot initiative process harder to use. But voters rejected Amendment 2. The democracy grade for Arkansas is among the worst in the nation. 

We look forward to sharing details on how the midterm elections affected each state's Democracy Report Card in the coming weeks.

Smooth Midterm Elections Relieve CEOs

“As long as the political system isn’t functioning, CEOs are going to be pulled in all the time to solve political issues . . . So it is in [their] interest to have a functioning system,” said our CEO Daniella Ballou-Aares in a recent Financial Times article titled: “Business Leaders See a Split Congress as Reason to Celebrate.”

Daniella also shared that several of the Leadership Now Members expressed “a lot of relief” that the midterm elections ran smoothly.

Read the full story here: https://www.ft.com/content/3428b2bc-a2d8-4df3-9247-20e1aaff2de8.

Ohio Business Leaders Urge Congress to Reform the Electoral Count Act

On November 6, Leadership Now Senior Advisor Richard Stoff co-signed an op-ed published in The Cleveland Plain Dealer along with five prominent Ohio business leaders. They urge Congress to pass much-needed reforms to the Electoral Count Act. 

“American democracy enables free markets to thrive, in which consumers and employees have a stake. It’s no coincidence that nearly all of the world’s largest companies are founded and based in democracies. 

But increasingly our elections, the very bedrock of our democracy, are under attack. An essential part of safeguarding our elections is fixing the glaring weaknesses in the rules governing our electoral and presidential transition process.”

Read the full op-ed: "Electoral Count Reform Act will strengthen our democracy and our economy: Albert B. Ratner and John E. Pepper"

Albert B. Ratner is the former co-chairman and CEO of Forest City Realty Trust in Cleveland, and John E. Pepper is the former chairman and CEO of Procter & Gamble in Cincinnati.

Joining them in authorship: 

Alex R. Fischer, former president and CEO of The Columbus Partnership. 

Richard A. Stoff, senior adviser to the Leadership Now Project and co-founder and former President and CEO of the Ohio Business Roundtable.

Michael H. Thaman, former chair and CEO of Owens Corning in Toledo. 

Thomas L. Williams, CEO of North American Properties and vice chairman and co-principal owner of the Cincinnati Reds.