The CEOs started calling before President Trump had even finished speaking. What America’s titans of industry were hearing from the Commander in Chief was sending them into a panic.
It was Nov. 5, 2020, two days after the election, and things weren’t looking good for the incumbent as states continued to count ballots. Trump was eager to seed a different narrative, one with no grounding in reality: “If you count the legal votes, I easily win,” he said from the lectern of the White House Briefing Room. “If you count the illegal votes, they can try to steal the election from us.”
The speech was so dangerously dishonest that within a few minutes, all three broadcast television networks spontaneously stopped airing it. And at his home in Branford, Conn., the iPhone belonging to the Yale School of Management professor Jeffrey Sonnenfeld began to buzz with calls and texts from some of the nation’s most powerful tycoons.
The CEOs of leading media, financial, pharmaceutical, retail and consulting firms all wanted to talk. By the time Tom Rogers, the founder of CNBC, got to Sonnenfeld, “he had clearly gotten dozens of calls,” Rogers says. “We were saying, ‘This is real—Trump is trying to overturn the election.’ Something had to happen fast.”
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For decades, Sonnenfeld has been bringing business leaders together for well-attended seminars on the challenges of leadership, earning a reputation as a “CEO whisperer.” A committed capitalist and self-described centrist, he has informally advised Presidents of both parties and spoke at Senate GOP leader Mitch McConnell’s wedding. Now he suggested the callers get together to make a public statement, perhaps through their normal political channels, D.C. industry lobbies such as the U.S. Chamber of Commerce and the Business Roundtable (BRT). But the CEOs wanted Sonnenfeld to do it; the trade groups, they fretted, were too risk-averse and bureaucratic. And they wanted to do it right away: when Sonnenfeld, who issues invitations for his summits eight months in advance in order to secure a slot on CEOs’ busy calendars, suggested a Zoom call the following week, they said that might be too late.
The group of 45 CEOs who assembled less than 12 hours later, at 7 a.m. on Nov. 6, represented nearly one-third of Fortune’s 100 largest companies: Walmart and Cowen Inc., Johnson & Johnson and Comcast, Blackstone Group and American Airlines. Disney’s Bob Iger rolled out of bed at 4 a.m. Pacific time to join, accompanied by a large mug of coffee. (Sonnenfeld, who promised the participants confidentiality, declined to disclose or confirm their names, but TIME spoke with more than a dozen people on the call, who confirmed their and others’ participation.)
The meeting began with a presentation from Sonnenfeld’s Yale colleague Timothy Snyder, the prominent historian of authoritarianism and author of On Tyranny. Snyder did not beat around the bush. What they were witnessing, he said, was the beginning of a coup attempt.
“I went through it point by point, in a methodical way,” recalls Snyder, who has never previously discussed the episode. “Historically speaking, democracies are usually overthrown from the inside, and it is very common for an election to be the trigger for a head of state or government to declare some kind of emergency in which the normal rules do not apply. This is a pattern we know, and the name for this is a coup d’état.” What was crucial, Snyder said, was for civil society to respond quickly and clearly. And business leaders, he noted, have been among the most important groups in determining whether such attempts succeeded in other countries. “If you are going to defeat a coup, you have to move right away,” he says. “The timing and the clarity of response are very, very important.”
A lively discussion ensued. Some of the more conservative executives, such as Blackstone CEO Stephen Schwarzman, wondered if the threat was being overstated, or echoed Trump’s view that late ballots in Pennsylvania seemed suspicious. Yet others corrected them, pointing out that COVID-19 had led to a flood of mail-in ballots that by law could not be counted until the polls closed. By the end of the hour, the group had come to agreement that their normal political goals—lower taxes, less regulation—weren’t worth much without a stable democracy underpinning them. “The market economy works because of the bedrock foundation of the rule of law, the peaceful succession of power and the reserve currency of the U.S. dollar, and all of these things were potentially at risk,” former Thomson Reuters CEO Tom Glocer tells TIME. “CEOs are normally hesitant to get involved in political issues, but I would argue that this was a fundamental business issue.”
A business council convened by Trump, pictured in February 2017, broke up within months. From left: Michael Dell, Dell; Phebe Novakovic, General Dynamics; Juan Luciano, Archer Daniels Midland; Jared Kushner; Donald Trump; Kenneth Frazier, Merck; Mark Fields, Ford; Denise Morrison, Campbell Soup; Greg Hayes, United Technologies.
Olivier Douliery—Bloomberg/Getty Images
The group agreed on the elements of a statement to be released as soon as media organizations called the election. It would congratulate the winner and laud the unprecedented voter turnout; call for any disputes to be based on evidence and brought through the normal channels; observe that no such evidence had emerged; and insist on an orderly transition. Midday on Nov. 7, when the election was finally called, the BRT immediately released a version of the statement formulated on Zoom. It was followed quickly by other trade groups, corporations and political leaders around the world, all echoing the same clear and decisive language confirming the election result.
Sonnenfeld thought the hastily convened “Business Leaders for National Unity,” as he’d grandly dubbed the 7 a.m. call, would be a one-off. But Trump’s effort to overturn the election persisted. So in the ensuing weeks, the professor called the executives together again and again, to address Trump’s attempt to interfere with Georgia’s vote count and the Jan. 6 Capitol insurrection. “This was an event which violated those rituals of America and created a visceral reaction,” Nick Pinchuk, CEO of the Kenosha, Wis.–based toolmaker Snap-on, tells TIME. “Talking about this, it kind of transformed from the realm of politics to the realm of civic duty. CEOs wanted to speak out about this, and Jeff gave us a way to do that.”
To Sonnenfeld, the effort—much of which has not been previously reported—underlined a generational shift taking place in the collective civic attitudes of the CEO class. Its effects are evident in Washington, where Big Business’s longtime alliance with the Republican Party is foundering. Congressional Republicans have divorced the Chamber of Commerce; the GOP’s corporate fundraising is diminished; Fox News anchors and conservative firebrands rant about “woke capital” and call for punitive, anti-free-market policies in retaliation. Many of the companies and business groups that implacably resisted Barack Obama have proved surprisingly friendly to Biden, backing portions of his big-spending domestic agenda and supporting his COVID-19 mandates for private companies. Political observers of both parties have tended to attribute these developments to the pressures companies face, whether externally from consumers or internally from their employees. But Sonnenfeld, who is in a position to know, argues that just as much of it comes from the changing views of the CEOs themselves.
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Snyder, the scholar of authoritarianism, believes the CEOs’ intervention was crucial in ensuring Trump left office on schedule, if not bloodlessly. “If business leaders had just drifted along in that moment, or if a few had broken ranks, it might have gone very differently,” he says. “They chose in that moment to see themselves as part of civil society, acting in the defense of democracy for its own sake.”
It was perhaps inevitable that Trump, the corporate-showman President, would force the private sector to reconsider its duty to society—and that Sonnenfeld would be the one to force the issue. For 2020 was not the two men’s first confrontation. Back in the mogul’s reality TV days, the business guru was a harsh critic—before burying the hatchet and giving Trump the idea for Celebrity Apprentice.
A Philadelphia native, Sonnenfeld, 67, was drawn from an early age to the human side of business. “He was always irrepressible, uninhibited—just a barrel of monkeys,” recalls the public relations guru Richard Edelman, who rowed crew with Sonnenfeld at Harvard. “You always knew he would be either a politician or a professor, not one of the gray-suited soldiers coming out of Harvard Business School.”
Sonnenfeld authored several scholarly publications before his 1988 book, The Hero’s Farewell: What Happens When CEOs Retire, became a surprise best seller. CEOs sought his counsel, and he realized they were starving for such insights: surrounded by subordinates and yes-men, powerful executives had plenty of opportunities to pontificate but few venues for learning from their peers. Yet Sonnenfeld’s interest in leadership psychology was unfashionable in an M.B.A. field focused on the technical workings of companies and markets. Denied tenure at Harvard, he started his “CEO College” at Emory University in 1989. After a decade, he moved it to Yale, where his Chief Executive Leadership Institute helped put its School of Management on the map. Today, Sonnenfeld’s executive seminars have many imitators, including CEO summits put on by Forbes, Fortune, Bloomberg and the New York Times.
Sonnenfeld with Trump in 2016
Courtesy Jeffrey Sonnenfeld/Yale school of Management
When The Apprentice premiered in 2004, Sonnenfeld reviewed it for the Wall Street Journal. The show, he wrote, was teaching aspiring leaders precisely the wrong lessons while fueling public disdain for business. “The selection process resembles a game of musical chairs at a Hooters restaurant,” he wrote. “No new goods or services are created, no business innovations surface, and no societal problems are solved.” A real-life leader who tried to run a business that way would quickly fail, he added.
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Trump fired back, insulting Sonnenfeld as a know-nothing academic. But he also tried to win him over, offering Sonnenfeld the presidency of Trump University, which he turned down, and an invitation to his Westchester golf club, which he accepted. Over lunch, Sonnenfeld said he’d stop criticizing the show if the players were cranky B-list celebrities instead of earnest young strivers. Trump liked the idea, and the following season he transitioned to an all-celebrity cast.
Sonnenfeld finally gave in to Trump’s pestering and invited him to one of his CEO summits at New York’s Waldorf Astoria hotel. “You would have thought it was the Pope, people were so amazed,” Sonnenfeld recalls. “But at the same time, the top tier of CEOs told me, ‘When he walks in, we’re walking out.’ And they did.” After Trump won the presidency, Sonnenfeld paid him a visit at Trump Tower and reminded him of the incident. “Funny thing about that, Jeff,” Trump said, “they’re all coming by here now.”
Over the course of the 2016 campaign, Sonnenfeld’s surveys of his seminar participants found that although around 75% identified as Republicans, 75% to 80% supported Hillary Clinton, he says. And while many were optimistic about Trump’s pro-business Administration, their enthusiasm soon dimmed. It wasn’t just the chaotic way he operated; he seemed determined to pit them against one another. “I started hearing from the CEOs of Lockheed and Boeing, saying, ‘Wait, he’s trying, over chocolate cake at Mar-a-Lago, to get a fight going between us over the cost of a fighter jet,’” Sonnenfeld recalls. It was the same with Ford vs. GM, Pfizer vs. Merck.
Sonnenfeld realized Trump was repeating the tactics from The Apprentice, the same zero-sum mentality that had buoyed him to political success: divide and conquer. “Trump’s whole modus operandi, his one trick his whole life, is to break collective action,” Sonnenfeld says. “The whole NAFTA battle was pitting Canada against Mexico. He constantly tried to divide France and Germany, the U.K. vs. the E.U., Russia vs. China. He tried to build up Bernie vs. Hillary, just like he did with the Republican primary candidates. As pathetically puerile a device as it is, with the GOP it worked magnificently well.”
But business leaders, unlike the Republicans, banded together to resist. In August 2017, when Trump opined that there were “very fine people on both sides” of the deadly white-supremacist march in Charlottesville, Va., Merck CEO Kenneth Frazier, who is Black, announced that he would step down from Trump’s American Manufacturing Council. Others—some prodded by Sonnenfeld behind the scenes—quickly followed. Within a few days, that council, along with another business advisory group, had disbanded. It was, Sonnenfeld says, the first time in history that the business community turned its back on a President’s call to service.
“He lost the business community in Charlottesville,” says Matthias Berninger, who heads public affairs for Bayer. “Ken leaving his council, that was the starting point of everything that followed.” Deregulatory actions Trump expected Big Business to appreciate were rebuffed: oil and gas companies publicly opposed his repeal of methane regulations, and many utilities shrugged off his rollback of CO₂ limits. The auto industry united against Trump’s attempt to eliminate mileage standards, only to be investigated by the Department of Justice.
Trump’s antagonism to immigration and free trade ran counter to business’s interests, says the D.C. corporate fixer and former GOP strategist Juleanna Glover. “Many corporations and CEOs had an abiding fear of being attacked in a Trump tweet, so staying out of Washington was a good risk-mitigation strategy,” she says. “The Republicans have largely abandoned their pro-business values, and it’s hard to negotiate in good faith when one of the parties is seen as continuing to undermine democratic values.”
Sonnenfeld with Biden in 2018
Courtesy Jeffrey Sonnenfeld/Yale school of Management
Trump may have been the catalyst. But the recent shift of the corporate class is only the latest in the long history of Big Business’s dance with Washington.
While many remember the robber barons of the Gilded Age, the same era produced a generation of innovative entrepreneurs (Thomas Edison, Luther Burbank) who were folk heroes. “The business leaders of the early to mid-1900s were the original ‘progressives,’” Sonnenfeld says. “They were for infrastructure, sustainability, safe workplaces, urban beautification, immigration.” Midcentury CEOs saw themselves as patriotic industrialists, allies of government and builders of society. During- the World Wars, they famously answered the call to contribute. Republican President Dwight Eisenhower appointed three sitting CEOs to his Cabinet.
By the 1970s, pollution and price-fixing scandals had tanked Big Business’s image. A few CEOs decided to break with the conservative politics of the U.S. Chamber of Commerce and the National Association of Manufacturers and came together to found the BRT. But the succeeding generation, in Sonnenfeld’s view, didn’t live up to the BRT’s original promise of civic virtue, focusing instead on attacking government interference and avoiding taxation. “It wasn’t that we had a few bad apples,” Sonnenfeld says. “There’s something wrong with the whole orchard in that period.”
The tech bust, corporate scandals such as Enron and the 2008 financial crisis pushed Americans’ esteem of business to historic lows. When the Obama Administration tried to get health care companies on board with the Affordable Care Act, not a single member of the industry came to the table. “They were like little kids throwing stones and hiding in the hedges,” Sonnenfeld says. “The business community was not trying to solve problems.”
But over the past decade, Sonnenfeld believes, a new generation of leaders has stepped into the public sphere to do well by doing good. In 2015, opposition from corporations like Eli Lilly and Anthem helped kill a proposed Indiana state law that would have allowed businesses to refuse to serve gay people. The following year, American Airlines, Microsoft and GE were among the companies protesting a North Carolina ordinance barring transgender people from using their preferred bathrooms. Similar bills were defeated in Texas and Arkansas. The business leaders who thwarted these efforts weren’t just stereotypically “liberal” corporate behemoths like Apple, Starbucks and Nike, Sonnenfeld notes. “It was the bedrock of traditional American industry in the heartland: UPS, Walmart, AT&T. They’re the ones who led the charge, saying, ‘This is not America. We don’t want our workforces divided over this.’”
Today, Wall Street firms grade companies on their climate and diversity initiatives as well as their balance sheets. In the wake of the 2018 mass shooting in Parkland, Fla., both Dick’s Sporting Goods and Walmart announced they would no longer sell assault weapons or ammunition. Dozens of companies cut ties with the NRA. In 2019, the BRT revised its charter to redefine “the purpose of a corporation,” saying companies should be accountable not only to their shareholders but also to the wider array of “stakeholders,” including customers, employees, suppliers and communities.
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“The role of the CEO has changed, and I don’t think anyone can sit on the sidelines,” says Paul Polman, the London-based former CEO of the consumer-goods giant Unilever, whose new book, Net Positive, argues that sustainability can go hand in hand with profit—one of a raft of recent do-gooder tomes by CEOs (including Salesforce CEO Marc Benioff, the co-owner of TIME). Under Polman’s leadership, Unilever set ambitious climate goals and sought to improve its human-rights record, lobbying against the death penalty for gay people in Uganda and deforestation in Brazil. “Smart CEOs realize that their business cannot function in societies that don’t function,” Polman tells TIME. “We have to be responsible and speak up, not just lobby in our own self-interest.”
Skeptics on the left see this kind of talk as cynical posturing. Democratic Senator Elizabeth Warren denounced the BRT’s “stakeholder” announcement as an “empty gesture,” and former Labor Secretary Robert Reich called it a “con.” Many of the statement’s signatories, liberals note, still preside over abysmal working conditions, environmental violations and racially segregated workplaces, while employing armies of lobbyists to resist government attempts to hold them accountable.
The right has revolted as well. GOP Senator Marco Rubio decries “woke corporate hypocrites,” while Trump has taken up the slogan “Go woke, go broke!” In the new book Woke, Inc., Vivek Ramaswamy, a tech entrepreneur turned self-styled class traitor, decries “corporate America’s game of pretending to care about justice in order to make money.”
The public, too, appears skeptical. In recent research conducted by Edelman, 44% of Americans say they trust CEOs to do the right thing, about on par with government leaders (42%) but lagging behind clergy (49%) and journalists (50%). A far greater share, nearly three-quarters of employees, trust the CEO of the company they work for.
In the spring of 2020, as the spread of COVID and Trump’s attempt to undermine the vote began to raise fears of an election meltdown, Sonnenfeld began privately raising the issue with prominent CEOs. He urged them to promote political participation to their employees and customers. For the first time, thousands of companies gave millions of workers paid time off to vote and volunteer at the polls. By October 2020, you could scarcely visit a retailer or open a mobile app without encountering a pro-voting, nonpartisan corporate message.
After the CEOs’ Nov. 7 statement, many—including Sonnenfeld—assumed their work was done. Despite Trump’s refusal to concede, dozens of courts rejected his challenges, all 50 states certified their electoral votes, and the presidential transition began. But on Jan. 3, the Washington Post published a recording of Trump’s phone call to Georgia secretary of state Brad Raffensperger, in which he cajoled and berated the election official to “find” the nearly 12,000 votes it would take to reverse his loss of the state.
So on Jan. 5, Sonnenfeld reconvened his executives. This Zoom was better attended than the first, with nearly 60 CEOs—and more concerned. Nobody quibbled with the “coup” terminology this time. There were CEOs Sonnenfeld had never met who had demanded invites after hearing about the November call. There were right-wing executives and former Obama and Bush Cabinet secretaries. The group voted unanimously to suspend donations to the GOP members of Congress who contested the election.
The next day, Jan. 6, validated their fears. In the aftermath of the Capitol riot, the group met again, and this time, 100% of the CEOs favored impeachment, Sonnenfeld says. The National Association of Manufacturers, known as the most conservative of the major trade lobbies, subsequently called for impeachment publicly, to the political world’s astonishment. Nearly a year later, 78% of the companies that pledged to withhold donations have kept true to their word, according to Sonnenfeld’s analysis of the latest campaign-finance data. One D.C.-based fundraiser for Republican candidates tells TIME she has virtually given up seeking money from corporate PACs as a result.
Sonnenfeld’s efforts didn’t end with Biden’s Inauguration. He was particularly disturbed by the election law the Georgia legislature began considering in the spring, one of many GOP-backed measures to make it harder to vote and easier to interfere with vote counting in future elections. In 1964, it was the former president of Coca-Cola who publicly shamed the white Atlanta business community into honoring Martin Luther King Jr. after he won the Nobel Peace Prize. Now Georgia’s 34 Fortune 1000 companies were largely silent in the face of a modern civil rights issue. In late March, Sonnenfeld and a former UPS executive penned a joint Newsweek op-ed calling out their “cowardice.”
On a subsequent Zoom, two leading Black executives, Merck’s Frazier and Kenneth Chenault of American Express, got more than 100 fellow CEOs to sign on to a statement opposing the Georgia voting law, which was published as a full-page ad in the New York Times and Washington Post. “The people who signed the letter did so because they didn’t see it as a partisan issue,” Frazier tells TIME. “They felt, as business leaders, that they shouldn’t stand on the sideline when our fundamental rights as Americans are at stake.”
But these moves also sparked a political backlash. Executives who had interceded during the election’s aftermath began to fall away from the group, leery of liberal activists seeking to apply similar pressure on other issues, like Texas’ new abortion law. The coalition that rallied with such alacrity to defend American democracy now appears splintered, unsure of the extent of the continuing threat or how to confront it.
“I really thought Jan. 6 was a turning point, a tipping point, but now I think maybe it was just an inflection point,” says Mia Mends, the Houston-based CEO of Impact Ventures at global food–services giant Sodexo. Companies including hers that spoke out against voting restrictions in Texas faced threats of retaliation from state GOP officials. “When that day of reckoning comes, on what side will you be? On what side were you?”
There have been no more pop-up Zooms. Sonnenfeld is back to his old grind, gathering CEOs and nudging them toward public-spiritedness. On a recent Tuesday in New Haven, he led a frenetic virtual discussion with the leaders of Starbucks, United, Xerox, Dell, Pepsi, Kellogg’s, Duke Energy and others, along with members of Congress and current and former Administration officials from both parties. Adam Aron, the CEO of AMC Entertainment, dialed in from his bedroom, looking disheveled, only to be hit with an aggressive Sonnenfeld question about whether the tech-stock mania that had sent his company’s value skyrocketing was really a scam.
Sonnenfeld understands that the CEOs feel whipsawed by the political chaos. “They’re being pelted with so many different causes,” he tells me after the Zoom, his town car speeding to the airport so he can make a board meeting in Miami. But he is scathing in his contempt for financiers who have ostentatiously embraced socially conscious investing while failing to speak up on voting and democracy issues. “The sheer, screaming cowardice of these institutional investors—they own 80% of corporate America, and they never miss a stage to proclaim their commitments to [environmental and social justice],” he says. “Where are they now? Why are they the last to take a stand?”
Yet Sonnenfeld has no doubt that having stepped up for democracy at a crucial time, the CEOs would do it again. “The GOP has created these wedge issues to divide society, and the business community is saying, ‘Wait a minute, that’s not us, those are not our interests,’” he says. “That doesn’t mean they’re going to rush off and support Bernie Sanders and the Democratic Party. But they’re trying to break free and find their own way.”
—With reporting by Simmone Shah and Julia Zorthian
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