Podcast Summary:

HBR IdeaCast – The Shifting Relationship Between Business and the U.S. Government
Date: March 17, 2026
Guest: Jeffrey Sonnenfeld, Professor at Yale and CEO of Chief Executive Leadership Institute
Hosts: Adi Ignatius, Alison Beard

Episode Overview

This episode explores how the relationship between business and the U.S. government has shifted in recent years, particularly against the backdrop of political volatility, new forms of government intervention, and changing expectations for CEOs. Harvard Business Review editors Adi Ignatius and Alison Beard sit down with Yale professor and CEO confidant Jeffrey Sonnenfeld to discuss how business leaders are navigating these tumultuous intersections, what history can teach us, and why silence is not always an option.

Key Discussion Points & Insights

The Current Mood in the C-Suite

• Pensive Leadership: CEOs today are highly cautious and reluctant to speak out individually due to fears of political vindictiveness.

  “The American C Suite is pensive. There are strong opinions, but don’t want to voice them individually because there’s a great fear of vindictiveness.”
  — Jeffrey Sonnenfeld [03:17]

Revisiting Friedmanism and Purpose

• Milton Friedman’s legacy is misunderstood—he acknowledged responsibilities beyond profit, coining the term "social amenities."
• CEOs do speak out—just selectively and strategically, often on urgent or high-impact issues.
• Example: Michael Dell tracks 100 issues at a time and picks those most urgent, such as voting rights and women’s health.

  “They pick and choose their issues… but they’re wondering where’s everybody else?”
  — Jeffrey Sonnenfeld [04:31]

Government Intervention and “State Capitalism”

• Increasing government intervention—where administration "picks winners and losers"—was not what most of the business community wanted.
• Businesses are now facing interventionist policies, including political pressure on firm leadership and forced equity changes.
• There’s confusion and anxiety as this is not in line with the free-market principles most leaders expect.

  “State capitalism isn’t what a lot of the business community was looking for.… that MAGA economics is very interventionist.”
  — Sonnenfeld [06:21]

Rationality Behind Political Engagement

• It’s often rational for CEOs to engage politically—even if it looks partisan—to protect business performance and reputation.
• Sonnenfeld emphasizes reputational risk, as seen with the exodus from Russia after its invasion of Ukraine.
• Historical precedent: Corporate action can make a difference—ex: Merck’s Ken Frazier after Charlottesville, Harley Davidson’s experience with tariffs, tech leaders directly engaging with Trump.

  “Collective action matters. But to spark collective action, you have to have some courageous individuals take a stand.”
  — Sonnenfeld [09:18]

The Dangers of Silence

• Trade associations have generally shown “a certain cowardice,” protecting cover for CEOs but rarely taking bold stands.
• Silence is not a viable option for major societal issues; collective industry voice is crucial for trust and change.
• Individual CEOs are often trusted more than academics, the press, or clergy.

  “Silence is not golden.… That is not a good thing for universities, law firms, CEOs or the nation….”
  — Sonnenfeld [10:55]

Navigating Divisive Politics as a Leader

• CEOs are trusted and influential—employees look to "my CEO" for guidance more than to any other public figure.
• Leaders must use judgment and practice "triage"—not every issue deserves a stance, but some issues demand it for the sake of social capital and trust.
• “Don’t fall for either cliché” (speaking out on every issue or hiding behind the slippery slope argument).

  “The societal context of business matters. You decide what are your priorities, and you practice triage.”
  — Sonnenfeld [22:38]

Uncertainty as the New Normal

• The unpredictability and volatility of the political environment is the top concern for business.
• Business can handle risk, but not when the government itself acts unpredictably.
• Leaders must focus on fortifying truth and social capital, rather than appeasing or conceding to power.

  “They want [risk-taking] to be on the business side, but not in government, which [needs] to be a reliable backbone.”
  — Sonnenfeld [18:54]

Practical Advice for Leaders

• Use collective action, not solo statements—work with trade associations and build consensus.
• Engage constructively with political leaders, including those with whom you disagree, to have influence.
• Recognize the foundational role of trust—speak up when necessary, especially when truth or democracy is at risk.
• Balance: Don’t try to have an opinion on every issue. Exercise judgment about when and how to act.
• Institutional leaders (not just CEOs, but clergy, academia, and others) must also protect democratic norms and societal trust.

  “There has to be a foundation of trust for a system to work. And that’s what CEOs are doing, I think, a pretty good job of fortifying. They just can’t be the only ones.”
  — Sonnenfeld [21:00]

Notable Quotes & Memorable Moments

• On CEO Coordinated Action:

  “In 2020, when President Trump...declared the election fraud...we called 100 CEOs, we got 93 of them. They came out with a very strong statement.”
  — Sonnenfeld [05:30]

• On Trade Group Cowardice:

  “With the exception of the national association of Manufacturers, a certain cowardice from the trade groups…”
  — Sonnenfeld [10:31]

• On Choosing the Right Issues:

  “Don’t take a position on every issue. Don’t get caught up in the slippery slope nonsense either. So there’s every issue or slippery slope. Don’t fall for either cliché. Use judgment. That’s why you’re there instead of an AI program to make decisions.”
  — Sonnenfeld [22:14]

• On Social Capital:

  “Social capital, he [Tocqueville] said, is as important, if not more important, than financial capital. And that’s what business leaders help produce by defining and standing by what the truth is as pillars of trust.”
  — Sonnenfeld [13:11]

• On Uncertainty:

  “Business needs to have a predictable environment...with these volatile conditions, they don’t know what to do, so they’re hanging back.”
  — Sonnenfeld [17:53]

Timestamps for Important Segments

• [03:17] — CEO Mood & Fear of Speaking Out
• [04:31] — CEOs Picking Issues & Friedman Misinterpretations
• [06:21] — State Capitalism and Unwanted Government Intervention
• [09:18] — The Power of Collective Action
• [10:55] — The Problems of Silence & Role of Trade Groups
• [13:11] — Social Capital, Trust, and CEO Influence
• [17:53] — Business Uncertainty & Navigating Volatility
• [22:14] — Using Judgment, Not Clichés, in Advocacy

Final Takeaways

• Collective strength and clear values are critical: CEOs must find ways to assert the truth, lead with integrity, and leverage collective action to influence both policy and public trust.
• Contextual and strategic advocacy: Speaking out should be judged carefully, balancing business interests, societal needs, and the health of democracy itself.
• Business and democracy are intertwined: Fostering social capital, not just financial capital, is an essential part of responsible corporate leadership in the current era.