IF YOU ARE an emblem of American harmony like Coca-Cola, you play your politics carefully, especially on issues as divisive as race and voting. The soft-drinks company did so brilliantly in 1964 when the elite of Atlanta—home to both Coca-Cola and Martin Luther King—threatened to snub the civil-rights leader on his return from winning the Nobel peace prize. Appalled at the potential embarrassment, Coca-Cola’s current and former executives worked quietly behind the scenes to persuade other industrialists to attend a dinner in King’s honour. They even sang “We Shall Overcome”.

Coca-Cola has weighed in this year, too, before and after Brian Kemp, Georgia’s Republican governor, signed a new law on March 31st that critics said would supress black voters. The firm’s discreet efforts to soften aspects of the bill before its passage backfired twice over. First civil-rights groups accused it of pusillanimity. When its boss, James Quincey, subsequently joined other Atlanta natives such as Delta Air Lines in expressing disappointment at the outcome, Republicans branded Coke and the others “woke” hypocrites.

On April 14th hundreds of firms, including giants like Amazon and Google, and prominent businesspeople, among them Warren Buffett, published a letter opposing “any discriminatory legislation” making it harder to vote. One prominent signatory, Kenneth Frazier of Merck, a drugmaker, told the New York Times it was meant to be non-partisan. In the words of William George of Harvard Business School, himself a former CEO, voter suppression “puts democracy at risk, and that puts capitalism at risk”.

Republicans, who have been pushing the bills in response to Donald Trump’s big lie that he was denied a second presidential firm by widespread fraud, call the corporate finger-wagging nakedly political. That so many household brands and boardroom grandees nevertheless increasingly wag their fingers at the traditionally business-friendly Republican Party shows that they are prepared to break a code of political silence that has served corporations well since the dawn of American capitalism. Why? And what effect will it ultimately have on their business?

America Inc was built on top of an innovation—the joint-stock company—that allowed businesses to put politics at arm’s length. Before the widespread introduction of this corporate structure in the first half of the 19th century, companies needed to secure a government charter to operate, which often involved greasing plenty of official palms. Afterwards they needed only a business plan and willing investors. The result was the most fecund business environment of all time.

In the early 20th century many bosses used their companies’ wealth to buy cronies in government, as well as political favours. In the aftermath of the second world war, the door between industry and political office was not so much revolving as wide open. “Electric Charlie” Wilson, boss of General Electric, and “Engine Charlie” Wilson, boss of General Motors, worked for several administrations in the 1940s and 50s. The period until the 1960s was a time of what John Kenneth Galbraith, a gadfly economist, called “countervailing power”. Big business was in a well-balanced scrum with big government and big labour. Some CEOs behaved like industrial statesmen, offering jobs for life to workers, building villages and golf courses, and presenting themselves as guardians of society.

That equilibrium was shaken in 1970 by Milton Friedman, a Nobel-prizewinning champion of laissez-faire economics. He argued that executives’ sole responsibility was to shareholders. So long as markets were free and competition fierce, maximising shareholder value would help society, by ensuring better products for customers and better conditions for workers. Firms that failed on either count would see buyers and employees defect to rival firms. Republicans like Ronald Reagan embraced Friedman through shrinking government and deregulating the economy. This gave rise to superstar firms and the cult of the celebrity CEO in the 1980s and 90s.

Even so, businessmen held their tongues on political matters. Instead, they put their faith in paid lobbyists and used industry groups like the Business Roundtable to campaign on their behalf. The lobbying concerned almost exclusively matters of direct concern to their bottom lines, such as taxes, regulations or immigration policies that might affect their employees. They studiously kept out of the broader political hurly-burly.

Corporate cash continues to flow into politics. But in recent years it is accompanied by a parallel stream of CEO activism. Weber Shandwick, a public-relations firm, dates this phenomenon back to 2004 when Marilyn Carlson Nelson, boss of Carlson Companies, a travel business, took a stand against sex trafficking. Her fellow travel bosses thought such pronouncements would hurt the industry’s neutral image. Instead, she was treated as a heroine by customers. CEOs in other industries took note. Gingerly at first and more conspicuously in the past five years or so, they began weighing in on subjects from the #MeToo and Black Lives Matter (BLM) movements to religious-freedom laws, gun control, gay rights and transgender-bathroom bills. Mr Trump’s divisive actions, such as a temporary ban on visitors from some Muslim countries, withdrawal from the Paris climate agreement or reaction to racist protests in Charlottesville, caused outrage across corporate America (even as it lapped up his tax cuts).

Mr Trump’s tenure also coincided with a period when public trust in government was already in decline, while that in business was rising. Despite companies’ and bosses’ image as handmaidens of heartless capitalism, Americans trust business a bit more than they do government or NGOs. Edelman, another PR firm, finds that 63% of Americans think CEOs should step in when governments do not fix societies’ problems. Heeding the call, in August 2019 members of the Business Roundtable, including bosses of 150 blue chips in the S&P 500 index, pledged to consider not just shareholders but also workers, suppliers, customers, the environment and other “stakeholders” in corporate decisions.

The trouble with such CEO advocacy is a lack of clarity about its motivations and impact—on the issues themselves, as well on the businesses in whose name it is undertaken. Although a lot of it is probably well-meaning, it is muddied by suspicions of hypocrisy and grandstanding. Before Christmas The North Face rejected an order from a Texas oil company for 400 of its pricey outdoor jackets because it did not want its brand associated with fossil fuels. This month an oil-industry group in Colorado awarded the company a tongue-in-cheek “extraordinary customer award”. It noted that many of its clothing products are made with products of petroleum—including its jackets.

In terms of its impact on hot-button issues, corporate activism can backfire if it causes the party against which it is directed to dig in its heels. Jeffrey Sonnenfeld of the Yale School of Management, who organised a gathering of CEOs on April 10th to discuss voter laws, acknowledges partisanship is involved. He believes both business and Mr Biden share a common interest in the centre ground. In the face of opposition from seemingly sanctimonious companies, the Republicans may be even more emboldened to press on with restrictive voter laws—just to rub it in.

Chief executives claim that they simply have no choice but to tackle societal concerns because in the age of social media their customers, employees and shareholders demand it. The evidence for such assertions is mixed.

Start with consumers. Some polls show that supporters of each party would buy more goods from companies that lean either right or left. But other research has found that consumers were more likely to remember a product they stopped using in protest at what a CEO said rather than one they started using in support. After a shooting spree in one of its superstores in 2019 Walmart banned some sales of gun ammunition. A subsequent study found that footfall in Walmart stores in Republican districts fell more sharply as a result than they rose in Democratic ones.

The impact on employees is also inconclusive. Many tech firms in the knowledge economy are happy to wear their leftie leanings on their sleeves, believing this will attract bright millennial workers who tend to share such views. But it can go too far. Lincoln Network, a conservative-leaning consultancy, found that firms promoting a political agenda can have an oppressive internal monoculture, which stifles creativity rather than fostering it.

Then there are the shareholders. Bosses rarely consult them before making political statements. Lucian Bebchuk of Harvard Law School found that among signatories of the Business Roundtable’s stakeholder pledge only one of 48 for whom data were available had consulted their board beforehand. That suggests a lot of the pro-social rhetoric is lip service.

Investors seem to see it that way. The share prices of S&P 500 companies whose bosses signed that declaration—which, if taken at face value, would mean that shareholders would have to share the spoils with other stakeholders—performed almost identically to those of companies whose CEOs were not among the signatories. That implies that markets did not consider the rhetoric to be of material importance. The fact that some of the loudest proponents of stakeholder capitalism, such as Salesforce, laid off workers amid the pandemic despite record revenues suggests that investors may be onto something.

In time, shareholders themselves may become more political. The rise of investment funds that consider environmental, social and governance (ESG) factors suggests an appetite for certain forms of social stance-taking when allocating capital. ESG investors are often willing to accept somewhat lower yields for corporate bonds tied to some do-gooding metrics. After studying ten years’ worth of public-interest proposals at S&P 500 companies, on everything from economic inequality to animal welfare, Roberto Tallarita, also of Harvard Law School, found that virtually no such proposals pass. But support for them is on the rise. In 2010 18% of shareholders voted for them, on average. By 2019 this had risen to 28%. One day the boardroom may become as political as the corner office. In the meantime, CEO pontificating is likely only to get louder.