Navigating Corporate Partnerships Involving Saudi Arabia
The PGA’s recent agreement to merge with its Saudi-funded competitor LIV Golf highlights a challenge for U.S. companies: the need to communicate openly about entering a partnership involving a country whose leadership has been linked to human rights abuses.
The golf merger, backed by a $650 billion sovereign wealth fund controlled by Saudi Crown Prince Mohammed bin Salman, quickly came under criticism from lawmakers, columnists, and activists. Among other things, they cited executions and imprisonments of political dissidents, along with the slaying of Washington Post journalist Jamal Khashoggi at the hands of Saudi agents in 2018. Family members of the victims of the Sept. 11 attacks also expressed outrage; for years, many of them have raised questions about Saudi support for the terrorists even as the kingdom has denied a role in the attacks.
Other U.S. companies should take note. If companies decide to engage in partnerships with the Saudi government, accept funding from government-controlled funds, or establish offices in the kingdom, it is essential to create a communications plan that lays out how to directly address the criticism that is likely to follow.
The PGA appeared to be caught flat footed by the criticism – without a meaningful response or explanation of how the merger aligned with its values. In the absence of an explanation, a chorus of critics filled the void, leaving the PGA’s reputation badly tarnished.
Companies need to tell their employees how alliances with the kingdom square with their values. They need to be able to explain their actions to customers, shareholders, and partners. They need to detail any benefits that could come from the new relationship – beyond profit.
For instance, if a U.S. hospital system opens a location in Saudi Arabia, it may say that its aim is to provide life-saving treatments to people who otherwise might not have access. The organization may also say its decision shouldn’t be seen as a sign of support for the government. They may go a step further and announce plans to donate a percentage of their proceeds to human rights groups.
Such messages won’t necessarily inoculate firms from criticism. But transparent explanations provide a counterpoint to assertions from critics – and may help forestall boycotts, resignations and severe reputational damage.
