Former Disney exec: CEOs ‘cannot ride the fence’ anymore on political issues

Former Walt Disney World Resort Executive Vice President of Operations Lee Cockerell joins Yahoo Finance Live to discuss Disney losing its ‘special status’ in Florida after tensions over the state's ‘Don’t Say Gay’ law and how CEOs are expected to respond to political issues.

Video Transcript

AKIKO FUJITA: Disney's showdown with Florida continues, with Governor Ron DeSantis signing the bill revoking Disney's special status into law last week. All of that just the very latest that has increased internal pressure on CEO Bob Chapek two years into the job. To talk more about that, let's bring in Yahoo Finance's Ali Canal, who's been following all the ins and outs of this story. What's the next step?

ALEXANDRA CANAL: It's interesting to talk about this, because I don't even think a lot of people even knew that Disney had this special tax district. I know in my friend group everyone's saying, wait, this was a thing? But when we talk about Bob Chapek, we're certainly at an inflection point when it comes to his leadership legacy, his response to the Parental Rights in Education Act, the so-called Don't Say Gay bill, this drama with DeSantis.

It's tainting that legacy. And when we look at Disney, the company only had two CEOs prior to Chapek. We had Michael Eisner and Bob Iger. And Iger was really looked at as the face of this company. He had a very specific leadership style. He really went in on diversity and inclusion, overseeing the productions of films like "Black Panther," "Moana."

And in fact, when it came to the so-called Don't Say Gay bill, Iger doubled down against it when Chapek was largely silent, saying that it's potentially harmful to children. So I think because Iger's legacy is still so fresh in the minds of both investors and employees, the expectation for Chapek to really deliver on this test was incredibly high. And he essentially failed on all cylinders.

By him not taking a side, he basically offended everyone in the process. And I think this is something that we're seeing with a lot of corporations today, especially with this battle with politicians on both sides of the equation. They need to take a stand politically. They need to weigh in on societal issues or you'll deal with what we're seeing at Disney today.

So I think the stock is largely trading relatively flat right now. I think investors are still trying to digest the long-term consequences and implications of this and what it can mean for the future of Disney and the company. But when it comes to Chapek specifically, he's largely been seen as a numbers guy and he seems to have totally missed the boat when it comes to Disney's culture, which is largely driven by its employees.

AKIKO FUJITA: Well, and on the issue of politics entering the fray, you have to wonder if there's more in the pipeline. There's, what, a dozen states roughly that are considering similar bills to what Florida's passed. And you wonder if that's going to conflict with other companies too. Let's bring in another voice into the conversation.

We've got Lee Cockerell. He is the former executive vice president over at Disney. Lee, it's good to talk to you today. Before we get into the specifics about Disney, I know you teach a course on executive leadership in management now. So I'm curious how you would rate the leadership of Bob Chapek so far into his tenure.

LEE COCKERELL: Well, you know, I think it's different times we're in right now and he's kind of in a dilemma. This Don't Say Gay bill, if he doesn't stand up and support the values of Disney, which are basically we treat everybody the same that comes to Disney no matter where they're from, or their religion, or sexual orientation-- and we also have a very inclusive workforce that expects us to stand up and support everyone, and we always have across the world. And I think that's why most people came there.

So dilemmas are always hard. What do you do? Do you stand up for your values of your company and hopefully yourself? Or do you get into these political battles which are more and more causing issues that probably didn't even exist? So that's kind of my point of view on this. He was in trouble either way he went.

ALEXANDRA CANAL: And, Lee, from a PR standpoint, how does Disney bounce back from something like this? I saw the other day on the cover of the "New York Post," it was DeSantis Dropkicks Disney. So no matter where you stand on this equation, it just doesn't look good. So what should Disney do next to really preserve their reputation?

LEE COCKERELL: Well, I think Disney needs to keep doing what they've always done. There was no issue until DeSantis brought this up. There was absolutely no issue. I don't even know if the teachers understand it or even-- I had three grandkids go through school in Florida and I don't ever remember any issues about talking about sexual issues in kindergarten through grade three.

I mean, I think it's pretty obvious to me why this was created. If you attack Disney, you're going to get great name recognition. And there's a group of people out there that have issues with these different sexual orientation and how to deal with them. So I think we just keep doing it and we keep taking care of everybody.

And I've been through these before, by the way. We've had boycotts before for years over different issues, including gay and lesbian issues. And it always shakes out. I think Disney will be around for a long, long time and this will fade out like everything else does.

AKIKO FUJITA: So, Lee, let's back up a bit, because we're talking about what is played out in Florida. There is a special district that Disney has been a part of that essentially allows them to operate as their own government, their own city. With this law passing, that gets revoked. From an operational standpoint, what does that mean for Disney?

LEE COCKERELL: Well, it's going to be difficult, because Disney, I think if you've been there, you know, like, that's probably the best run city in the world. It's 40 square miles. They have a huge number-- 52 million visitors a year, 75,000 cast members working there. It's a city, including contractors.

And we can get things done very quickly. We follow all codes. I would tell you Disney is the safest zip code in America, the cleanest zip code in America, and maybe even the happiest zip code in America. So it has worked just fine.

And I am almost positive the local jurisdictions in Orange County and Osceola County don't want anything to do with having to get involved in this. They're having enough trouble just dealing with the growth that's already happening in Orlando-- getting highways, and housing, and all of those kinds of things done. Disney's even building low income housing on the property now to take care of the issues which local government doesn't seem to be able to do. So it depends how you think about it. Disney would not be the place it is today without this district being able to expedite and get things done quickly.

AKIKO FUJITA: From an experiential standpoint, what do you think changes for visitors?

LEE COCKERELL: What do I think changes now because of it?

AKIKO FUJITA: Changes for visitors?

LEE COCKERELL: Oh, I don't think there's going to be any change for a visitor. I think this is just like all these other issues that come up. This will be gone in a few weeks or a few months. Disney may lose the district. Disney will continue to figure it out, like we always do.

And new construction may take longer. Getting the highway fixed may take longer. But I think once the guests are here, they're going to have the same experience they've always had. And the average guest comes back [INAUDIBLE] their whole life. And every day, 70% of the people at Walt Disney World have been there before. And so it's hard-- it's difficult today for big companies. But it'll continue to be-- it'll be here a long, long time doing quite, quite well, and making a lot of money, and taking care of a lot of guests.

ALEXANDRA CANAL: And, Lee, what's your take on big consumer-facing corporations like Disney getting involved in politics? Do you think we've entered a new era where these corporations need to take a side one way or another when it comes to these societal issues?

LEE COCKERELL: Well, politics is what-- politics is just part of life. You either stand up for what you believe in or you don't stand up for what you believe in. And I think we like to call it politics, but it's really how life is determined and how people are treated, and respected, and included, and involved, and listen to, and their opinion counts. And that's what most of America is saying.

We want people to be more included. And I hope we continue to stand for that. And I mean, I don't think you could give up your values over these kinds of things-- although some companies are going to try. And going down the middle today doesn't work very well. I agree with you there.

You need to pretty much lead out loud, let people know where you stand, who you are. And then the guests will determine whether they want to do business with you or not.

AKIKO FUJITA: Lee, it has been a rocky few months for Bob Chapek, no question about that. To Ali's point, it was first about him saying we're not going to get involved in the politics, then being revealed that Disney had actually donated to some of these lawmakers who supported the bill, and then he had to reverse course but still had employees walk out. If you could advise him, how does he correct course-- knowing the culture of the company?

LEE COCKERELL: You have to anticipate the kinds of things that are going to happen in life and be ready for them. And this is not an issue you couldn't anticipate like any crisis and be ready for-- I would say generally, Bob probably thinks now, and I do too, that he should have come out right away.

And you've got to stand up quick. You can't wait a week to decide how you're going to respond to an issue like gay issues today or political issues. You've got to respond. You've got to be there.

And you will have somebody mad at you no matter which way you respond. That's just the way life is today. And you can't avoid it. And you cannot ride the fence. Those days are over.

And everything-- political is like-- we say political, don't get involved in politics. But politics is what drives our lives, and every part of it, and how people are treated, and what good quality of life they have. And so it's one of those dilemmas that can't be solved.

You're going to get in trouble one way or the other. I found that out my whole career-- making the guests happy, the employees happy, and making money is really quite difficult.

AKIKO FUJITA: Well, and that was before you could express your outrage on social media, right?

LEE COCKERELL: Attendance is going to tell the story. We'll see. I would be buying stock right now if I was Disney, because the money is going to keep rolling in.

AKIKO FUJITA: Well, Lee, appreciate your insight today.

LEE COCKERELL: That's how Americans are. We have short memories.

AKIKO FUJITA: Lee Cockerell, former Disney World Resort Executive VP, and our thanks to Ali Canal as well.