by Bradley K. Googins, Executive Director, The Center for Corporate Citizenship at Boston College

Bill Gates recently discovered it may be a lot easier fighting antitrust suits across the globe than weighing in on social issues at home. While he clearly didn’t choose to engage in the legal battles, Microsoft has discovered companies don’t really have a choice to sit out critical public policy debates, either.

The difficulties for Microsoft began when it decided not to take a position on anti-discrimination legislation in the state legislature. Previously the company had supported the legislation and has always exceeded intent of legislation in its corporate hiring practices. This neutrality set off a public maelstrom – from employees and gay rights activists who felt betrayed to conservatives led by a local minister using public bullying tactics. (Microsoft later shifted its stand and announced it would support a bill in Washington state to ban discrimination against gays and lesbians in housing, employment and insurance in the next legislative session. Read an email sent to Microsoft employees by CEO Steve Ballmer on May 6, 2005.)

Before the fires were out in Washington state, Bill Gates was in Washington, D.C., discussing education and immigration issues. Ironically, the critics, so vocal about the anti-discrimination legislation, showed no outrage when Gates identified national policies he says threaten the economic security of our country.

The fact is, Microsoft’s involvement in public policy – at the state and national levels – is driven by the same motivation: keeping Microsoft competitive. A high tech company that can’t attract the best talent will quickly fall behind. Education standards, visa quotas and hiring practices are all part of the mix that makes for a strong company.

While there is no question that the anti-discrimination controversy was mostly influenced by employee stakeholders, it could be argued that it is equally important to shareholders. What if it turned out Gen X’s version of Bill Gates goes to a competitor because he or she doesn’t think the environment at Microsoft would be welcoming? Why couldn’t that be grounds for a shareholder lawsuit?

It should come as no surprise that issues Microsoft is facing such as gay rights are now at the doorstep of businesses across the country. The very division around core values and public policy issues that has paralyzed the political process, politicized the courts and increasingly divide virtually every institution, is now front and center in corporate boardrooms.

While our political structures are easily influenced by how the wind is blowing, business today is still firmly managed by what’s best for the bottom line. A big globally competitive company cannot bow to the political zeitgeist because no successful company is governed by so-called conservative or liberal ideologies.

Companies now have to manage stakeholders inside and out. Expectations on corporate roles and responsibly in society are shaped by the continuing downsizing of government roles, responsibilities and resources, primarily as an outcome of the process of globalization. Ensuring that there are few regulations on business, that corporate taxes remain low, and that government intervention remains as minimal as possible, has unintended consequences on the role and expectations for corporations in society.

So what is a company to do? How does it even begin to think about its role? Clearly no company can or should weigh in on every social and moral issue of the day. It does have to manage an increasingly active, technologically connected and organized group of stakeholders on all sides of the issues. One framework executives should consider involves four guidelines:

1. Your values are your company’s compass. The most critical step a company can take is to examine a particular issue through the prism of its values. Corporate values – who the company is and what it stands for – are the ultimate test for vetting an issue. It becomes a compass that informs true North and steers a company through the complex currents and the multiple stakeholder views  that surround any of these issues.

2. Stakeholder management is key. Business today has to establish solid relationships with all of its stakeholders. Any one stakeholder has the ability to seriously impair the business. At the same time these stakeholders are the key to creating support for the company on these issues.

3. Constant and consistent communication inside and out is essential.  These issues demand a very high investment in communicating with stakeholders inside and outside the business. When issues get out of control, it is most often the case that poor communication is at the core of the problem.

4.  Leadership will make the difference. At the end of the day there is no substitute for leadership in getting on top of these issues. Because these issues are so sensitive to the array of stakeholders, corporate leadership is both expected and needed. In addition, leading companies will see these challenges as strategic; if handled well, they can add to the competitive advantage of a company in deepening stakeholder engagement.

It isn’t easy – there will always be competing stakeholder demands and expectations that require the artistic skill of a tightrope walker, and the diplomatic grace of a statesman.

There is no pre-ordained road map for companies seeking guidance on these issues. The only thing evident from the collective experience of American business is that the issues are becoming more complex and are arriving at their door more often. By investing in key capacities such as communications, issue management and stakeholder relations, companies can build strong responses that are tied to their values and turn potential landmines into corporate leadership that serves to build competitive advantage.

The lawyers versed in antitrust have been very valuable to Microsoft. The company needs to invest in others equally agile in managing key stakeholders.

It’s not surprising that a company that doesn’t fit the mold of the Wall Street blue chip – for which the “old rules” were written – has become the lightning rod for all sorts of contemporary policy issues. Perhaps Microsoft can lead the way in creating a new operating system that best fits the 21st century company.