Zicklin School of Business hosted an online webinar on Oct. 14 to discuss free speech and fiduciary duty by corporate leaders.
Paul Roth, senior partner at McDermott Will & Shuttle and Burt Neuborne, New York University law professor and founding legal director at the Brennan Center for Justice, were featured at the talk, which was led by Baruch College alum Larry Zicklin.
“Ethics and peer pressure probably have more to do with what corporate executives can say, than either the First Amendment or Delaware Chancery Court,” Neuborne said.
Elon Musk, CEO of Tesla Inc., SpaceX, X and xAI, was frequently mentioned in the talk for his outspoken leadership.
Musk was active on X about his political views toward President Donald Trump and when he joined the president during his campaign. He later became the head of the Department of Government Efficiency.
“When Elon Musk was so active in DOGE and in Republican politics, and this is an assumption, Tesla sales, which went down a lot both in the United States and especially in Europe, might have gone down because he offended so many potential Tesla buyers,” Neuborne said.
Tesla shares also fell when a feud between Musk and Trump began on X over the ‘Big Beautiful Bill,’ which would cut billions of dollars in renewable energy research and development in the U.S.
During the talk, Zicklin asked if Musk violated his responsibility when speaking out.
“You have to ask Musk himself what he understands his own personal ethical obligations are,” Neuborne said.
While the topic of the First Amendment was raised during the discussion, Neuborne explained that it is only enforced and implied when dealing with the government. Otherwise, it is a private company, organizing its lives in ways that are “ethically important to them and ethically in terms of values important to the people they deal with, and law doesn’t play a role in it,” he said.
When Roth was asked how he would advise Musk if put in that position, he answered that he would’ve told him to sign a clause that prohibits him from talking about public policy without consulting the board.
His reasoning was due to the association Musk has with Tesla; he is the founder and cannot be separated from the image of the company.
“How you as a person conduct yourself as not to harm the company, which you’re representing,” Neuborne said.
He said that even if someone else became CEO of Tesla while Musk was the founder, the CEO would still be the public figure of the company and would have to act in ways not to harm the company.
A Gallup survey found that 51% of U.S. adults believe that businesses should take a public stance on major issues. However, when consumer opinion does not agree with the company’s opinion, many consumers stop purchasing items from the business.
More politically outspoken corporate leaders could cause a change in the way consumers shop, as consumers could consider political viewpoints instead of the company’s services.
